F 

59  \ 


BANCROFT 
LIBRARY 

THE  LIBRARY 

OF 

THE  UNIVERSITY 
OF  CALIFORNIA 


THE  NEW  PUBLIC  LAND  POLICY  WITH 
SPECIAL  REFERENCE  TO  OIL  LANDS 


BY  WM.  E.  COLBY 


(REPRINTED  FROM  THE  CALIFORNIA  LAW  REVIEW 
FOR  MAY,  1915.) 


•'.  R  Y 


California  Law  Review 

Volume  III.  MAY,  1915  Number  4 

The  New  Public  Land  Policy  with  Special 
Reference  to  Oil  Lands 


THE    sentiment    of    the    people    of    the    United    States,    as 
reflected  by  the  attitude  of  the  President,  of  Congress  and 
of  the  Supreme  Court  of  the  United  States  with  regard  to 
the  disposal  of  certain  of  the  lands  of  the  public  domain  has  in 
the  past  few  years  undergone  a  vital  and  radical  change.     This 
recent  change  is  the  outcome  of  a  marked  conflict  of  opinion  as 
to  the  appropriate  manner  of  disposing  of  the  remainder  of  the 
public  domain.1 

The  public  lands  acquired  by  the  federal  government  during 
the  past  century  by  cession,  purchase  and  conquest  have  amounted 
to  over  one  and  a  half  billion  acres.  This  immense  empire 
was,  when  acquired,  an  almost  totally  undeveloped  wilderness 
and  in  order  to  encourage  and  foster  its  settlement  and  devel- 
opment, the  government  held  out  great  inducements,  not  only 
to  its  own  citizens,  but  to  the  citizens  of  other  countries  who 
were  willing  to  transfer  their  allegiance  and  become  pioneers. 
Agricultural  lands  were  given  away  to  those  who  became  actual 
settlers  and  lands  valuable  for  other  purposes  were  sold  at 
nominal  prices.  Mineral  lands  were  "declared  to  be  free  and 
open  to  exploration  and  purchase."2  This  lavish  policy,  coupled 


1  This  new  policy  does  not  materially  affect  the  disposition  of 
lands  which  are  purely  agricultural  in  character  and  which  will  con- 
tinue to  be  disposed  of  in  accordance  with  the  provisions  of  the  various 
existing  acts  of  congress  providing  for  such  disposal.  As  George 
Otis  Smith  said  before  the  Public  Lands  Committee  of  the  senate  at  a 
hearing  on  the  Oil  Lands  Leasing  Bill,  "in  the  case  of  agricultural 
lands  there  is  the  home  on  the  land  idea,  which  puts  them  in  a  class 
by  themselves".  Neither  is  there  any  pronounced  attempt  at  present 
to  materially  change  the  policy  of  disposing  of  metalliferous  lands. 

2§  2319  U.  S.  Rev.  Stats. 


24 


270  CALIFORNIA  LAW  REVIEW 

with  the  wonderful  discoveries  in  these  lands  of  wealth  of  mine, 
forest,  water  and  water  power  available  to  all  comers,  has  re- 
sulted in  the  disposition  by  the  federal  government  and  the 
passing  into  private  ownership  of  by  far  the  more  fertile  and 
valuable  half  of  this  vast  acreage. 

Awakened  by  this  rapid  shrink.ige  of  the  public  domain 
and  the  realization  that  if  prompt  action  were  not  taken  all 
of  the  valuable  public  lands  would  pass  into  private  ownership, 
certain  leaders  in  the  creation  of  public  opinion  started  a  new 
trend  of  thought,  having  for  its  basis  certain  fundamental  ideas.8 
These  were,  briefly,  the  belief  that  the  liberal  policy  of  the  gov- 
ernment in  holding  out  inducements  to  prospectors  and  pioneers 
had,  in  the  main,  accomplished  its  purpose,  and  in  many  in- 
stances the  disposal  of  natural  resources  had  far  over-reached 
the  point  where  the  greatest  public  good  would  be  subsei"ved 
by  a  continuation  of  that  policy;  that  there  were  certain  of 
these  resources  so  intimately  associated  with  the  future  welfare 
of  the  nation  that  it  was  for  the  best  interests  of  the  public 
at  large  that  these  resources,  viz:  timber,  coal,  petroleum,  water 
power,  phosphates,  potash,  etc.  should  be  retained  in  public 
ownership  since  their  use  could  thus  be  best  conserved  and 

3  Apropos    of   this    subject,    Secretary   of   the    Interior,    Franklin    K. 
Lane  has  the  following  to  say: 

"  .  .  .  .  there  exists  a  feeling  in  the  West  that  its  affairs  and 
needs  have  not  been  given  that  consideration  at  the  hands  of  the 

National     Government    which     they    merit they    are    urable 

to  understand  why  ways  have  not  been  found  by  which  the  grreat 
bodies  of  coal  and  oil  lands,  of  phosphate  and  potash  lands,  may 
be  developed,  and  waters  of  the  mountains  made  available  for 
the  generation  of  power  and  the  redemption  of  the  desert.  There 
is  one  very  simple  explanation  for  the  existence  of  this  feeling. 
We  have  adventured  upon  a  new  policy  of  administering  our 
affairs  and  have  not  developed  adequate  machinery.  We  have 
called  a  halt  on  methods  of  spoliation  which  existed,  to  the  £reat 
benefit  of  many,  but  we  have  failed  to  substitute  methods,  sane, 
healthful,  and  progressive,  by  which  the  normal  enterprise  of  an  am- 
bitious people  can  make  full  use  of  their  own  resources.  We  abruptly 
closed  opportunities  to  the  monopolist,  but  did  not  open  them  to 

the    developer we    had    put    into    force    a    new    land    policy, 

which    caused    dismay    and    discontent Congress    has    always 

been  most  generous  as  to  the  disposition  of  the  national  kinds. 
....  out  of  the  abuse  of  the  Nation's  generosity  there  came  a 
reaction  against  a  policy  that  was  so  liberal  as  to  be  dangerous. 
....  So  there  has  slowly  evolved  in  the  public  mind  the  concep- 
tion of  a  new  policy — that  land  should  be  used  for  that  purpose 
to  which  it  is  best  fitted,  and  it  should  be  disposed  of  by  the 
Government  with  respect  to  that  use.  To  this  policy  I  believe  the 

West  is  now  reconciled "     Annual  Report  of  the  Secretary 

of    Interior    (1913),   pp.    1-3. 


THE  NEW  LAND  POLICY  271 

controlled;  and  that  there  was  also  imminent  danger  that  they 
might  be  monopolized  to  the  detriment  of  the  public.4  The 
idea  of  a  public  revenue  to  be  derived  from  the  leasing  and  sale 
of  these  resources  has  also  come  into  prominence.  This  is  the 
modern  idea  of  conservation  of  natural  resources.5 

One  of  the  first  of  these  resources  to  be  conserved,  as 
having  a  most  vital  effect  upon  the  future  welfare  of  the  nation, 
were  the  forests.  The  assurance  of  a  conserved  supply  of  lumber 
and  the  regulation  of  stream  flow  and  its  natural  benefit  to 
the  navigability  of  such  streams  were  the  controlling  induce- 
ments which  have  resulted  in  the  withdrawal  from  disposal 
and  permanent  reservation  of  millions  of  acres  of  timbered 
lands  now  embraced  within  the  "national  forests"  in  the  west- 
ern states.6 

4  "The  objects  to  be  sought  by  amendment  of  the  public  land  laws 
are,    first,    purposeful    and    economical    development    of    resources    for 
which  there  is  present  demand,  with  retention  of  such  control  as  may 
insure    against    unnecessary    waste    or    excessive    charges    to    the    con- 
sumer, and,  second,  the  reservation  of  title  in  the  people  of  all  resources 
the    utilization    of    which    is    conjectural    or   the    need    of   which   is    not 
immediate."     Geo.   Otis   Smith,  Annual  Report   of  the   Director   of  the 
U.   S.  ^Geological   Survey,  (1911),   p.   9.     These   annual   reports,    1908   to 
date,  contain  much  interesting  information  and  forecast  the  change  in 
public    land    policy. 

5  Of    course,    conservation    in    its    broadest    sense    embraces    a    far 
greater  field  and  is  applicable  to  the  use  of  private  as  well  as  of  public 
resources.     Conservation  in  this  modern   sense  has  been  defined  to  be 
"the   utilization    of   lands    for   their   greatest   vahie".     The    Classification 
of  the   Public  Lands,  by  George   Otis   Smith,  et   al.,   Bulletin  537  U.   S. 
Geological    Survey,    p.    1.     Another    definition,    credited    to    Dr.    C.    W. 
Hayes,  chief  geologist  of  the  U.  S.  Geological  Survey,  is  "the  utilization 
of    natural    resources    with    a    maximum    efficiency    and    a    minimum    of 
waste".      Professor    Van    Hise    has    defined    conservation    of    natural 
resources    to    mean    "that    they    should    remain    as    nearly   undiminished 
as  possible  in  order  that  this   heritage  of  natural  wealth  may  pass  in 
full  measure  to  succeeding  generations".     The  Conservation  of  Natural 
Resources  in  the  United  States,  by  Chas.   R.  Van  Hise   (1910). 

A  more  comprehensive  definition,  with  special  reference  to  public 

lands,  is  the  following:  "National  conservation is  a  policy  of 

primarily  placing  the  remnant  of  the  public  domain,  other  than  that 
portion  of  it  which  is  essentially  agricultural  in  character,  in  a  state  of 
reservation  and  subsequently  dealing  with  it  or  its  natural  resources 
in  such  a  manner  as  will  economically  yield  the  best  results  to  all  the 
people.  Its  principal  aim  is  to  obtain  a  maximum  economic  production 
at  a  minimum  of  waste;  to  prevent  individuals  or  aggregations  of  indi- 
viduals from  securing  monopolies;  and  to  exact  some  equivalent  for 
the  privileges  granted".  Lindley  on  Mines,  3d  ed.,  §  200.  Anyone 
interested  in  the  subject  will  find  an  excellent  presentation  of  "Con- 
servation Measures  and  their  Effect  on  the  Mining  Industry"  in  §§ 
200-200c  of  this  work. 

«  Acts  of  March  3,  1891,  26  Stats,  at  L.  1103;  June  4,  1897,  30  Stats, 
at  L.  1103;  Feb.  1,  1905,  33  Stats,  at  L.  628;  Mar.  4,  1907,  34  Stats,  at 
L.  1256;  etc. 


272  CALIFORNIA  LAW  REVIEW 

Public  sentiment  rapidly  crystallized  so  that  coal  lands  were 
next  deemed  of  such  far  reaching  value  to  the  public  that  their 
conservation  by  retention  of  federal  control  was  urged  ipon 
congress7  and  in  rapid  succession  followed  similar  proposals  as 
to  lands  valuable  for  water  power  control8,  asphalt,  petro  eum 
oil  and  gas,  nitrates,  phosphates  and  potash.9  Congress  has 
either  already  enacted  legislation  providing  for  the  federal  con- 
trol of  lands  of  this  character  or  is  expected  to  act  shortly  on 
these  subjects.  The  federal  reclamation  and  irrigation  of  arid 
lands  in  the  West  is  also  a  part  of  this  modern  conservation 
movement.10 

This  comparatively  sudden  reversal  of  policy  on  the  part 
of  the  federal  government  and  the  termination  of  the  oppor- 
tunity for  private  interests  to  acquire  these  valuable  lands  very 
naturally  met  with  determined  opposition.  The  constitutionality 
of  these  conservation  measures  adopted  by  congress  and  the 
action  of  the  President  in  anticipating  such  legislative  action 
by  withdrawing  from  private  entry  the  lands  in  question  pend- 
ing the  enactment  of  the  desired  statutes,  has  been  seriously 
questioned  on  every  conceivable  ground. 

Of  greatest  immediate  interest  to  California,  as  far  as  the 
operation  of  the  new  public  land  policy  is  concerned,  has  been 
the  withdrawal  of  oil  lands  situated  on  the  public  domain  within 
the  state.  The  California  deposits  of  mineral  oil  are  among 
the  most  extensive  and  important  deposits  in  the  world  and  the 
manner  in  which  the  federal  government  will  administer  these 
withdrawn  lands  and  provide  for  the  extraction  and  disposition 


7  Until  July,   1906,  the  government  had  followed  the  policy  o;    dis- 
posing of  coal  lands  at  the  minimum  prices  prescribed  in  the  statutes, 
U.  S.  Rev.  Stats.  §  2347.     Thereafter  it  classified  these  lands,  and  has 
disposed  of  them  at  appraised  values,  in  many  cases  far  in  excess  of  the 
statutory    minimum.      The     Public     Lands     Committee    of    the     senate 
eliminated  all  reference  to  coal  from  the  general  leasing  bill  passed  by 
the  house  at  the  last  session  of  congress,  for  the  reason  that  the  need 
for  new  legislation  for  the  mining  of  coal  on  the  public  lands  is  not  so 
great  as  that  for  the  other  minerals  specified.     Senate  Report,  No.  947, 
63rd  congress,  3rd  session. 

8  The  executive  withdrawal  of  lands  valuable  for  water-power  sites, 
irrigation,    etc.    was    authorized    by    congress,    June    25,    1910,    36    Stats, 
at  L.  §  847. 

9  These  latter  substances  are  considered  of  great  general  economic 
value  because  of  their  use  in   the  manufacture   of  fertilizers   to   renew 
the  productivity  of  worn-out  agricultural  lands. 

10  Act  of  June  17,  1902,  32  Stats,  at  L.  388,  amended  June  25,  1910, 
36  Stats,  at  L.  836. 


THE  NEW  LAND  POLICY  273 

of  this  oil  is  of  vital  interest  to  the  future  of  this  state.  Because 
of  the  arid  character  of  the  surface  lands,  vast  areas  of  the 
territory  overlying  the  oil  strata  had  remained  a  part  of  the 
public  domain.  The  discovery  of  the  existence  of  this  oil  in 
commercial  quantities  and  the  creation  of  a  market  for  the  crude 
output  resulted  in  a  rush  of  locators  to  the  oil  fields  commen- 
surate with  and  in  many  respects  similar  to  the  congestion 
and  conditions  resulting  from  new  "strikes"  or  discoveries  of 
the  gold  fields. 

The  general  placer  law  was  the  only  operative  mining  law 
permitting  of  the  acquisition  of  these  deposits.11  Immediately 
following  the  disclosure  of  the  value  of  these  public  oil  lands 
there  were  the  usual  attempts  to  acquire  them  by  indirection 
and  by  distorting  other  land  laws  in  the  attempt  to  defeat  the 
mineral  claimant.  "Scrippers",  i.  e.  those  who  attempted  to 
make  selections  of  these  oil  lands  in  lieu  of  other  lands  under 
an  exchange  system  provided  for  by  law,  homesteaders,  desert 
entrymen,  etc.,  all  proceeding  under  laws  providing  for  the 
acquisition  of  agricultural  lands,  which  laws  expressly  exclude 
mineral  lands  from  their  operation,  hastened  to  make  filings, 
in  most  instances  lacking  in  good  faith.  Locators  under  the 
mining  laws  even,  claiming  discoveries  of  gypsum  cropping 
on  the  surface,  were  also  subject  to  the  valid  criticism  of  attempt- 
ing to  gain  by  subterfuge  the  valuable  oil  deposits  which  they 
could  not  acquire  directly  without  the  expenditure  of  time  and 
money.  These  attempts  were  rendered  possible  by  the  physical 
fact  that  the  valuable  oil-bearing  sands  lay  at  considerable 
depths  below  the  surface  and  could  be  reached  only  after  drill- 
ing to  the  depth  of  hundreds  or  even  thousands  of  feet  and 
at  great  cost.  In  some  instances  it  has  taken  wells  of  4000 
or  5000  feet  in  depth  and  the  expenditure  of  over  $250,000.00 
to  reach  the  oil.  The  courts  early  held  that  only  actual  dis- 
coveries of  oil  by  drilling  would  satisfy  the  statutory  require- 
ment of  discovery  essential  to  validate  a  mining  claim  and  that 
mere  oil  seepages  or  stains  or  other  surface  indications  were 
not  sufficient.12 


11  §§  2329-2333  U.  S.  Rev.  Stats.,  a  codification  of  the  Federal 
Placer  Act  of  1870.  The  act  of  Feb.  11,  1897,  29  Stats,  at  L.  526,  pro- 
vided that  lands  containing  petroleum  or  other  mineral  oils  could  be 
acquired  under  the  laws  relating  to  placer  mineral  claims. 

"Nevada  Sierra  Home  Oil  Co.  v.  Home  Oil  Co.  (1899),  98  Fed. 
673,  at  p.  675;  Miller  v.  Chrisman  (1903),  140  Cal.  440,  75  Pac.  1083,  74 


274  CALIFORNIA  LAW  REVIEW 

While  this  holding  gave  the  fictitious  agricultural  claimants 
a  certain  technical  advantage  over  the  bona  fide  mineral  clai- 
mants, yet  the  courts  made  short  work  of  these  subterfuges 
and  finally  eliminated  most  of  these  pseudo  filings  from  further 
serious  consideration.13  The  land  department  also  came  to  the 
rescue  of  the  oil  miners  and  withdrew  from  agricultural  entry 
large  areas  of  land  adjacent  to  the  proven  territory  pending 
classification  by  government  geologists.14  This  peculiar  situation 
forced  on  government  officials  an  early  realization  of  the  fact 
that  the  placer  mining  laws  with  their  rigid  discovery  require- 
ment were  a  misfit  when  applied  to  the  location  of  oil  lands.15 
The  courts  of  California  and  Wyoming  aided  the  diligem  oil 
locator  in  a  measure,  by  a  liberal  interpretation  of  the  inchoate 
right  acquired  by  him  in  making  his  location  prior  to  actual 
discovery  and  held  that  such  a  locator,  who  in  good  faith  was 
prosecuting  the  drilling  of  his  discovery  well  with  reasonable 
diligence,  would  be  protected  to  the  full  extent  of  his  boundaries 
from  clandestine  or  forcible  invasion  by  others  attempting  to 
locate  subsequently.16  Thus  many  of  the  serious  problems  which 
confronted  the  oil  locator  in  the  early  days  of  the  field  have 
since  been  removed,  so  that  the  amount  of  litigation  arising 
from  these  original  sources  is  becoming  relatively  unimportant. 


Pac.  444,  98  Am.  St.  Rep.  63;  s.  c.  (1905),  197  U.  S.  313,  49  L.  Ed.  77C, 
25   Sup.   Ct.  Rep.  468. 

13  Cosmos  Exploration  Co.  v.  Gray  Eagle  Oil  Co.   (1900),  104  Fed. 
20,  112  Fed.  4,   (1903),  190  U.  S.  301,  47  L.  Ed.   1064,  23  Sup.  Ct.  Rep. 
692;  Kern  Oil  Co.  v.  Clarke   (1897),  30  L.  D.  550,  on  review,  31   L.  D. 
288;    State   of   California    (1913),  41    L.    D.   592;    Hirshfeld   v.    Chrisman 
(1911),    40    L.    D.    112;    see    also    Diamond    Coal    Co.    v.    United    States 
(1914),  233  U.  S.  236,  58  L.  Ed.  936,  34  Sup.  Ct.  Rep.  507;  Washirgton 
Securities  Co.  v.  United  States   (1914),  234  U.  S.  76,  58  L.  Ed.   1220,  34 
Sup.  Ct.  Rep.  72;  Leonard  v.  Lennox  (1910),  181  Fed.  760. 

14  United  States  v.  Midwest  Oil  Co.  (1915),  35  Sup.  Ct.  Rep.  3d9,  at 
p.   315.      Similar   withdrawals    from    non-mineral    acquisition    have    been 
made  as  a  measure  of  protection  to  surface  locators  under  the  mining 
laws,  of  lands  overlying  deep  seated  deposits  of  copper  ore  in  Arizona. 
Report  of  Director  of  U.  S.  Geological  Survey  (1913),  p.  154. 

15  Classification  of  the  Public  Lands,  Bulletin  537  U.   S. 'Geological 
Survey,  p.  38;  Report  of  Secretary  of  the  Interior  Lane  (1913),  p.  13. 

"Weed  v.  Snook  (1904),  144  Cal.  439,  77  Pac.  1023;  Mercec  Oil 
Co.  v.  Patterson  (1908),  153  Cal.  624,  96  Pac.  90;  Miller  v.  Chrisman 
(1903),  140  Cal.  440,  73  Pac.  1083,  74  Pac.  444,  98  Am.  St.  Rep.  63; 
Borgwardt  v.  McKittrick  Oil  Co.  (1913),  164  Cal.  650;  Little  Sespe 
Cons.  Oil  Co.  v.  Bacigalupi  (1914),  167  Cal.  381,  139  Pac.  802;  Smith  v. 
Union  Oil  Co.  (1913),  166  Cal.  217,  135  Pac.  966;  Whiting  v.  Straup 
(1908),  17  Wyo.  1,  95  Pac.  849. 


THE  NEW  LAND  POLICY  275 

In  addition  to  this  conviction  that  the  placer  laws  were  a 
misfit,  the  land  department  was  also  influenced  most  forcibly 
by  the  conservation  movement  which  has  already  been  com- 
mented on  and  which  is  resulting  in  the  establishment  of  the 
new  public  land  policy.  The  appreciation  of  the  importance  of 
oil  as  a  mineral  fuel  and  source  of  heat  and  power,  next  to  that 
of  coal,  was  accentuated  by  the  magnitude  of  the  discoveries 
in  the  oil  fields  of  California  and  Wyoming.  Here  was  an  asset 
of  vital  concern  to  the  future  welfare  of  the  nation  found  in 
almost  fabulous  quantities  on  land  which  was  in  part  still  public 
domain.  The  rapidity  with  which  these  lands  were  being  lo- 
cated and  thus  passing  into  private  ownership,  convinced  the 
public  officials  and  leaders  in  conservation  ideas  that  if  prompt 
action  were  not  taken,  most  of  the  available  territory  would  be 
privately  absorbed  and  as  far  as  petroleum  was  concerned,  the 
new  policy  of  government  ownership  and  control  would  be  im- 
possible of  accomplishment.17 

The  importance  of  conserving  a  supply  of  this  new  fuel  for 
the  requirements  of  the  navy  was  also  in  the  minds  of  the 
interested  officials  though  it  had  not  at  that  time  assumed  the 
importance  which  has  since  arisen  through  the  more  definite 
determination  to  use  fuel  oil  in  the  navy.18  Acting  on  the  sug- 
gestion of  his  advisors  in  the  land  department,19  President  Taft 
caused  an  executive  order  or  proclamation  to  be  issued  on 
September  27,  1909,  withdrawing  from  all  forms  of  disposal 
and  "in  aid  of  proposed  legislation  affecting  the  use  and  dis- 
position of  the  petroleum  deposits  on  the  public  domain",  over 
three  million  acres  of  land  in  California  and  Wyoming  which 
included  most  of  the  territory  known  or  thought  by  the  Geolog- 
ical Survey  to  be  valuable  for  oil.20  This  sudden  and  sweeping 


"See  United  States  v.  Midwest  Oil  Co.  (1915),  35  Sup.  Ct.  Rep. 
309,  at  p.  310;  The  Classification  of  Public  Lands,  Bulletin  537  U.  S. 
Geological  Survey,  p.  38. 

18  At    the    request    of    the    navy    department,    two    naval    petroleum 
reserves  were  created  in  the   California  oil  fields  on  Sept.  2,   1912,  and 
Dec.  13,  1912,  estimated  to  contain  250,000,000  barrels  of  oil.     Report  of 
Director  of  U.  S.   Geological  Survey  (1913),  pp.  151-152. 

19  The   history   of   the   origin   and   development   of   this   proposal    is 
outlined   by   its    chief    sponsor,    George    Otis    Smith,    before    the    Public 
Lands  Committee  of  the  senate  at  a  hearing  on  the  Oil  Lands  Leasing 
Bill,  63rd   congress,  3rd   session,   pp.  208-210. 

20  Of   course,    much    of   the   land   withdrawn   included    private    titles 
which  had  already  vested  and  which  were  consequently  not  affected  by 
the  withdrawal.     The  net  area  of  the  public  lands  thus  withdrawn  could 


276  CALIFORNIA  LAW  REVIEW 

action  on  the  part  of  the  executive  in  withdrawing  practically 
all  of  the  remaining  public  lands  possessing  probable  oil  values 
caused  great  consternation  among  the  oil  operators.  It  injected 
a  tremendous  element  of  uncertainty  into  the  operations  of  many 
and  resulted  in  a  decided  curtailment  of  expenditures  looting 
toward  the  making  of  discoveries.  Many  bona  fide  operators 
were  placed  in  the  position  of  not  knowing  whether  their  ex- 
penditures already  made  would  be  forfeited  or  not,  and  yet  they 
hesitated  in  the  dubious  experiment  of  continuing  to  "th-ow 
good  money  after  bad".  President  Taft  himself  was  not  con- 
vinced of  the  unqualified  legality  of  his  act21,  and  in  order  to 
place  his  power  of  withdrawal  beyond  question  he  urged  congress 
to  give  him  positive  statutory  authority,  which  resulted  in  the 
passage  of  the  Act  of  June  25,  igio.22  Immediately  after  its 
passage  and  acting  under  its  authorization,  he  again  caused 
these  same  lands  and  additional  lands  which  had  been  withdrawn 
from  time  to  time  subsequent  to  the  first  withdrawal,  to  be  with- 
drawn. The  validity  of  this  later  withdrawal  in  pursuance  of 
congressional  sanction  has  not  been  seriously  questioned.  The 
Withdrawal  Statute  expressly  provided: 

"That  this  act   shall   not  be   construed  as   a   recognition, 
abridgment,  or  enlargement  of  any  asserted  rights  or  ck.ims 
initiated  upon  any  oil  or  gas-bearing  lands   after  any  with- 
drawal of  such  lands  made  prior  to  the  passage  of  this  Act" 
Thus  all  question  as  to  the  validity  of  the  original  Taft  with- 
drawal of  September  27,   1909,  was  left  open  for  the  determin- 
ation   of    the    courts.23      The   practically    universal    consensus    of 


only  be  estimated  in  a  very  general  way,  for  the  included  location  titles 
were  in  all  conditions  varying  from  mere  "paper  locations"  not 
accompanied  by  actual  possession,  nor  followed  by  any  attempt  at  dis- 
covery work,  to  locations  where  all  the  legal  requirements  had  been 
strictly  complied  with  and  discovery  actually  made.  Until  "court  has 
been  held"  and  all  of  the  underlying  and  essential  facts  disclosed,  it  will 
be  impossible  to  determine  whether  many  of  these  private  claims  are 
valid  or  not.  The  Government  has  instituted  suits  to  test  the  val  dity 
of  many  of  these  private  claims. 

21  This   doubt   was   expressed   by   the    President   in   his   message   to 
congress  of  January  14,  1910,  and  also  in  public  speeches. 

22  36  Stats,  at  L.  847.     This  act  only  provided  for  the  withdrawal 
of    mineral    lands    containing    coal,    oil,    gas    and    phosphates,    but    was 
amended  August  24.  1912,  (37  Stats,  at  L.  497),  in  order  to  provide  for 
the  withdrawal  of  lands  valuable  for  potash,  and  in  anticipation  of  the 
fact  that  other  minerals  might  later  be  found  desirable  to  be  included  in 
such    reservations,    the   act   was   made   operative   as   to   all   non-metallic 
minerals. 

23  In   the   recent    Midwest   decision    by   the    Supreme    Court    of   the 
United  States   and   hereinafter  noted,   the  majority  opinion   states   that 


THE  NEW  LAND  POLICY  277 

opinion  among  the  oil  operators  and  the  lawyers  of  the  West 
who  examined  into  the  question,  was  that  the  first  or  executive 
withdrawal  was  invalid.  Acting  on  opinions  of  their  legal  ad- 
visors to  this  effect,  many  operators  located  withdrawn  lands, 
or  commenced  diligent  prosecution  of  work  on  lands  already 
located.24  As  a  consequence,  cases  involving  lands  affected  by 
the  first  order  of  withdrawal  began  to  arise,  necessitating  a  de- 
termination of  the  validity  of  this  executive  action.  The  land 
department  first  passed  on  the  question,  deciding  that  the  order 
of  September  27,  1909,  was  valid.25  Then  Judge  Riner,  federal 
District  Judge  for  Wyoming,  in  the  now  famous  Midwest  case, 
sustained  a  demurrer  to  the  bill  of  complaint  filed  by  the  United 
States,  holding  that  the  withdrawal  order  was  void.26  This  case 
was  taken  to  the  Supreme  Court  of  the  United  States  and  became 
the  test  case  on  this  question.  Meanwhile  on  June  i,  1914, 
Judge  Dooling,  one  of  the  federal  District  Judges  in  California, 
decided27  that  the  promulgation  of  the  order  in  question  was 
"an  encroachment  upon  the  domain  of  Congress"  and  was  there- 
fore unlawful. 

The  Midwest  case  just  referred  to  involved  a  tract  of  public 
land  in  Wyoming  which  was  take.n  possession  of  by  private  in- 
dividuals six  months  after  its  withdrawal  under  the  order  of 
September  27,  1909.  A  well  was  drilled,  discovery  of  oil  made 
and  quantities  of  oil  extracted.  The  federal  government  brought 
suit  to  recover  the  land  and  for  an  accounting.  The  govern- 
ment took  an  appeal  from  the  District  Court's  ruling  sustaining 
the  demurrer  and  dismissing  the  bill.  The  Circuit  Court  of 
Appeals  certified  certain  questions  to  the  Supreme  Court  of  the 
United  States  which  latter  court  ordered  the  entire  record  sent 
up  for  consideration.  The  Supreme  Court  recently  decided  the 
case  in  favor  of  the  government,  reversing  the  ruling  of  the 
Wyoming  federal  District  Court.28 


"The    Act    left    the    rights    of    parties  ....  to    be    determined    by    the 
state  of  the  law  when  the  proclamation  was  issued". 

24  The   withdrawal   act   of  June  25,    1910,   expressly   protected   bpna 
fide  claimants  of  oil  lands  who  were,  at  the  date  of  any  order  of  with- 
drawal   theretofore    or    thereafter    made,    diligently    prosecuting    work 
leading  to   a  discovery. 

25  In  re  Lowell  (1911),  40  L.  D.  303. 

26  No  written  opinion  was  filed  in  this  case. 

27  United  States  v.   Midway  Northern  Oil   Co.    (May  29,   1914),  216 
Fed.  802. 

28  United   States  v.  The  Midwest  Oil   Company   (Feb.  23,   1915),  35 
Sup.    Ct.    Rep.    309.      Five    justices    joined    in    the    prevailing    opinion, 


278  CALIFORNIA  LAW  REVIEW 

The  case  was  twice  argued  orally  and  several  briefs  were 
filed  by  parties  interested  in  other  lands  similarly  affected.  The 
importance  of  this  decision  to  the  oil  industry,  as  well  as  the 
interesting  character  of  some  of  the  problems  involved,  will 
justify  a  brief  analysis  of  the  case. 

The  single  and  controlling  question  was  the  validity  of  the 
withdrawal  order  and  the  power  of  the  President  to  make  such 
an  order  in  the  absence  of  positive  congressional  authorization. 
Justice  Lamar  wrote  the  prevailing  opinion  and  held  that  it  was 
unnecessary  to  determine  as  an  original  question  whether  the 
President  had  this  power  because  "of  the  legal  consequences 
flowing  from  a  long  continued  practice  to  make  orders  like  the 
one  here  involved".  He  calls  attention  to  the  fact  that  su:h  a 
practice  dates  from  an  early  period  in  the  history  of  our  gov- 
ernment and  that  during  the  past  eighty  years  a  multitude  of 
executive  orders  have  been  made  without  express  statutory  auth- 
ority, operating  to  withdraw  every  kind  of  land — mineral  and 
non-mineral — that  would  otherwise  have  been  open  to  private 
acquisition  under  existing  acts  of  congress.  Instances  of  at  least 
252  executive  orders  withdrawing  public  lands  for  military,  Ind- 
ian, and  bird  reservations  were  cited  where  there  were  no  ex- 
press statutes  empowering  the  President  to  withdraw  any  of  the 
lands  affected.  He  said  that  it  was  natural  that  the  government 
should  retain  for  these  purposes  what  it  already  owned,  es- 
pecially since  no  private  right  was,  at  the  date  of  the  withdrawal, 
in  existence  to  be  injured,  for  prior  to  the  initiation  of  some 
right  under  public  statute,  no  citizen  had  an  enforceable  interest; 
that  the  President  was  in  a  position  to  know  when  the  public 
interest  required  such  withdrawals  and  his  action  was  subject 
to  disaffirmance  by  congress  which  had  repeatedly  acquiesced  in 
the  practice;  and  that  this  was  also  the  interpretation  p'aced 
upon  the  existence  of  the  power  by  the  law  officers  of  the  gov- 
ernment at  various  times. 

In  answer  to  the  argument  that  while  there  might  be  this 
usage  yet  these  instances  of  the  exercise  of  this  power  did  not 
establish  its  validity,  Justice  Lamar  said: 

"But  government  is  a  practical  affair  intended  for  prac- 
tical  men.     Both   officers,   lawmakers   and   citizens   naturally 


Justice    McReynolds    not    participating.      Three    justices    dissented.      A 
petition  for  rehearing  was  filed  April  16,  and  denied  April  19,  1915. 


THE  NEW  LAND  POLICY  279 

adjust  themselves  to  any  long  continued  action  of  the  Ex- 
ecutive Department — on  the  presumption  that  unauthorized 
acts  would  not  have  been  allowed  to  be  as  often  repeated 
as  to  crystallize  into  a  regular  practice". 

Therefore,  usage  itself  shall  be  given  weight  in  determining 
the  existence  of  a  power.29  Not  that  "the  Executive  can  by  his 
course  of  action  create  a  power"  but  "the  long-continued  prac- 
tice, known  to  and  acquiesced  in  by  Congress,  would  raise  a 
presumption  that  the  withdrawals  had  been  made  in  pursuance 
of  its  consent  or  of  a  recognized  administrative  power  of  the 
Executive  in  the  management  of  the  public  lands."  The  United 
States,  acting  through  congress,  is  the  proprietor  and  owner  of 
the  public  domain,  and  conditions  may  arise  requiring  that,  in 
the  public  interest,  the  land  be  withheld  from  sale  and  this  power 
may  be  granted  by  implication  to  the  executive  just  as  might  be 
the  case  between  a  private  owner  and  his  agent.  The  attempted 
distinction  between  reservations  and  withdrawals  was  held  un- 
availing. If  permanent  reservations  made  by  the  executive  and 
already  noted  are  valid,  then  the  lesser  exercise  of  similar  power, 
involved  in  making  a  temporary  withdrawal  in  aid  of  future 


29  The  best  considered  criticism  of  this  doctrine  is  to  be  found  in 
Cooley's  Constitutional  Limitations  7th  ed.,  Chapter  IV,  pp.  102-107, 
from  which  the  following  extracts  are  taken: 

"Where  there  has  been  a  practical  construction,  which  has  been 
acquiesced  in  for  a  considerable  period,  considerations  in  favor  of 
adhering  to  this  construction  sometimes  present  themselves  to  the 
courts  with  a  plausibility  and  force  which  it  is  not  easy  to 
resist 

"Great  deference  has  been  paid  in  all  cases  to  the  action  of  the 
executive  department,  where  its  officers  have  been  called  upon, 
under  the  responsibilities  of  their  official  oaths,  to  inaugurate  a  new 
system,  and  where  it  is  to  be  presumed  they  have  carefully  and 
conscientiously  weighed  all  considerations,  and  endeavored  to 
keep  within  the  letter  and  the  spirit  of  the  Constitution.  If  the 
question  involved  is  really  one  of  doubt,  the  force  of  their  judg- 
ment, especially  in  view  of  the  injurious  consequences  that  may 
result  from  disregarding  it,  is  fairly  entitled  to  turn  the  scale  in  the 
judicial  mind. 

"Where,  however,  no  ambiguity  or  doubt  appears  in  the  law, 
we  think  the  same  rule  obtains  here  as  in  other  cases,  that  the 
court  should  confine  its  attention  to  the  law,  and  not  allow 
extrinsic  circumstances  to  introduce  a  difficulty  where  the  lan- 
guage is  plain.  To  allow  force  to  a  practical  construction  in  such 
a  case  would  be  to  suffer  manifest  perversions  to  defeat  the  evi- 
dent purpose  of  the  lawmakers.  'Contemporary  construction  .  .  .  . 
can  never  abrogate  the  text;  it  can  never  fritter  away  its  obvious 
sense;  it  can  never  narrow  down  its  true  limitations;  it  can  never 
enlarge  its  natural  boundaries.'  While  we  conceive  this  to  be  the 


280  CALIFORNIA  LAW  REVIEW 

legislation,  is  lawful  and  examples  were  cited  where  this  power 
of  withdrawal  had  also  been  exercised,  and  attention  call*  d  to 
the  fact  that  in  1902  the  senate  specifically  requested  information 
of  the  secretary  of  the  interior  as  to  the  extent  that  public  ands 
had  been  withdrawn  and  the  authority  for  such  action.  Con- 
gress after  receiving  this  information  did  not  repudiate  the  prac- 
tice and  its  silence  was  acquiescence,  or  equivalent  to  cor  sent, 
until  revoked  by  subsequent  congressional  action. 

An  unusually  vigorous  dissenting  opinion  was  written  by 
Justice  Day  and  concurred  in  by  Justices  McKenna  and  Van 
Devanter.30 

Justice  Day  quotes  article  four,  section  three,  of  the  Consti- 
tution of  the  United  States,  which  empowers  congress 

".  .  .  to  dispose  of  and  make  all  needful  rules  and  reg- 
ulations respecting  the  territory  or  other  property  belonging 
to  the  United  States  " 


true  and  only  safe  rule,  we  shall  be  obliged  to  confess  that  some 
of  the  cases  appear,  on  first  reading,  not  to  have  observed  these 
limitations.  In  the  case  of  Stuart  v.  Laird,  above  referred  tc,  the 

practical  construction  was  regarded  as  conclusive 

"It  is  believed,  however,  that  in  each  of  these  cases  an  examin- 
ation of  the  Constitution  left  in  the  minds  of  the  judges  sufficient 
doubt  upon  the  question  of  its  violation  to  warrant  their  looking 
elsewhere  for  aids  in  interpretation,  and  that  the  cases  are  not  in 
conflict  with  the  general  rule  as  above  laid  down.  Acauies:ence 
for  no  length  of  time  can  legalize  a  clear  usurpation  of  prwer, 
where  the  people  have  plainly  expressed  their  will  in  the  Constitu- 
tion, and  appointed  judicial  tribunals  to  enforce  it.  A  power  \s 
frequently  yielded  to  merely  because  it  is  claimed,  and  it  rmy  be 
exercised  for  a  long  period,  in  violation  of  the  constitutional  pro- 
hibition, without  the  mischief  which  the  Constitution  was  des  gned 
to  guard  against  appearing,  or  without  any  one  being  sufficiently 
interested  in  the  subject  to  raise  the  question;  but  these  circum- 
stances cannot  be  allowed  to  sanction  a  clear  infraction  o:  the 
Constitution.  We  think  we  allow  to  contemporary  and  pra:tical 
construction  its  full  legitimate  force  when  we  suffer  it,  where  it  is 
clear  and  uniform,  to  solve  in  its  own  favor  the  doubts  which  arise 
on  reading  the  instrument  to  be  construed." 

It  will  be  noted  that  the  case  of  Stuart  v.  Laird  (1803),  1  Cranch 
299,  2  L.  Ed.  115,  adversely  commented  on  by  Cooley,  is  one  Q-  the 
leading  authorities  on  which  the  prevailing  opinion  in  the  Mic.west 
case  is  based.  The  authorities  discussed  in  the  note  on  p.  107  of  Cooley 
are  also  of  considerable  interest  in  this  connection  as  indicating  that, 
after  all,  the  question  is  fundamentally  a  matter  of  opinion  as  to 
whether  it  is  best  to  "bend  the  Constitution  to  suit  the  law  o:"  the 
hour"  and  yield  "to  considerations  of  expediency  in  expounding  {-"  or 
whether  "the  success  of  free  institutions  depends  upon  a  rigid  adher- 
ence to  the  fundamental  law",  whereas  "by  yielding  to  such  influences 
constitutions  are  gradually  undermined  and  finally  overthrown." 

80  It  is  interesting  to  note  that  these  latter  two  are  western 
appointees  and  together  with  the  two  federal  District  Judges  below 


THE  NEW  LAND  POLICY  281 

and  cites  a  previous  decision  of  the  Supreme  Court  which  holds 

that 

"this  implies  an  exclusion  of  all  other  authority  over  the 
property  which  could  interfere  with  this  right  or  obstruct 
its  exercise".31 

He  states  that  there  is  nothing  in  the  Constitution  suggesting  or 
authorizing  any  augmentation  of  executive  authority  said  to  arise 
by  implication  from  the  tacit  consent  of  congress  in  its  long 
acquiescence  in  such  executive  action  of  making  the  specified 
withdrawals.  Withdrawals  have  been  made  by  the  President  in 
the  past  and  have  the  sanction  of  judicial  approval  but  only 
in  cases  (a)  where  congress  has  already  declared  its  policy  as 
being  an  appropriate  one  for  the  use  of  public  lands  such  as 
military  and  Indian  reservations,  or  (b)  where  grants  of  land 
by  congress  are  so  conflicting  that  the  withdrawal  of  the  lands 
affected  is  sustained  until  congress  has  had  an  opportunity  to 
clear  up  the  ambiguity.82 

Taking  up  the  Taft  withdrawal,  Justice  Day  calls  attention  to 
the  fact  that  congress  had  by  specific  statute33  authorized  the  location 
of  lands  valuable  for  oil  under  the  placer  mining  laws.  The  sole 
purpose  for  making  the  withdrawal  was  in  anticipation  that  con- 
gress might  provide  a  better  system  for  the  disposition  of  such 
lands  and  to  preserve  some  oil  lands  in  California  as  a  basis  of 
naval  supply  in  the  future.  It  is  not  claimed  that  the  President 
had  express  authority  from  congress.  Such  withdrawals  must 
be  limited  to  purposes  which  congress  has  itself  recognized  by 
direct  legislation  or  long  continued  acquiescence  as  public  pur- 
poses. It  is  conceded  that  the  President  might  reserve  tracts 
for  definitely  fixed  public  purposes  declared  by  congress,  such 
as  military  or  Indian  reservations,  but  the  action  here  taken  in 
withdrawing  a  large  part  of  the  public  domain  from  the  opera- 
tions of  the  public  land  laws  is  neither  sanctioned  by  the  Con- 
stitution, nor  conferred  by  congressional  legislation,  nor  by  that 


who  declared  this  order  invalid,  presumably  reflect  the  western  thought 
and  attitude  toward  this  question. 

81  Wisconsin  etc.  R.  R.  Co.  v.  Price  County  (1890),  133  U.  S.  496, 
504,  10  Sup.  Ct.  Rep.  341. 

32  Justice  Day  entered  into  a  rather  elaborate  review  of  the  specific 
withdrawals  claimed  to  constitute  the  basis  for  the  executive  custom  of 
withdrawal  held  in  the  prevailing  opinion  to  have  ripened  into  implied 
authority  and  classifies  these   withdrawals  under  either  the   one   head- 
ing or  the  other. 

33  February  11,  1897,  29  Stats,  at  L.  526. 


282  CALIFORNIA  LAW  REVIEW 

long  acquiescence  as  to  be  the  equivalent  of  a  grant.  The  Pres- 
ident's powers  are  defined  by  the  Constitution  which  does  not 
confer  upon  him  any  power  to  enact,  suspend  or  repeal  law  3  of 
congress,  and  the  Supreme  Court  has  refused  to  sustain  vith- 
drawals  made  by  the  executive  in  contravention  of  a  policy  for 
the  disposition  of  lands  expressly  declared  in  acts  of  congress.34 
In  order  to  be  valid,  an  executive  withdrawal  must  either  be 
authorized  by  express  congressional  authority  or  clear  impli- 
cation of  such  authority.  Justice  Day  calls  attention  to  the 
limited  powers  of  the  United  States  government  vested  definitely 
by  the  Constitution  in  the  three  co-ordinate  branches  of  the  gov- 
ernment and  quotes  from  the  famous  case  of  Kilbourn  v.  Thomp- 
son, to  the  effect  that  it  is  essential  to  the  successful  working 
of  this  system  that  the  respective  functions  of  these  branches 
shall  be  broadly  and  clearly  defined  and  that  they  shall  not  be 
permitted  to  encroach  upon  the  powers  confided  in  the  other 
branches,  but  each  "be  limited  to  the  exercise  of  the  powers 
appropriate  to  its  own  department  and  no  other",35  and  concludes 
the  dissenting  opinion  with  the  following  language: 

"These  principles  ought  not  to  be  departed  from  in  the 
judicial  determinations  of  this  court,  and  their  enforcement 
is  essential  to  the  administration  of  the  Government,  as  cre- 
ated and  defined  by  the  Constitution.  The  grant  of  author- 
ity to  the  Executive,  as  to  other  departments  of  the  Govern- 
ment, ought  not  to  be  amplified  by  judicial  decisions.  The 
Constitution  is  the  legitimate  source  of  authority  of  all  who 
exercise  power  under  its  sanction,  and  its  provisions  are 
equally  binding  upon  every  officer  of  the  Government,  from 
the  highest  to  the  lowest.  It  is  one  of  the  great  functions  of 
this  court  to  keep,  so  far  as  judicial  decisions  can  subserve 
that  purpose,  each  branch  of  the  Government  within  the 
sphere  of  its  legitimate  action,  and  to  prevent  encroachments 
of  one  branch  upon  the  authority  of  another. 

In  our  opinion,  the  action  of  the  Executive  Department 
in  this  case,  originating  in  the  expressed  view  of  a  sub- 
ordinate official  of  the  Interior  Department  as  to  the  desir- 
ability of  a  different  system  of  public  land  disposal  than  that 
contained  in  the  lawful  enactments  of  Congress,  did  not 
justify  the  President  in  withdrawing  this  large  body  of  land 
from  the  operation  of  the  law  and  virtually  suspending,  as  he 
necessarily  did,  the  operation  of  that  law,  at  least  until  a 


34  Cases  are  cited   involving  withdrawals   in  aid   of   railroad    grants 
held  to  have  been  invalid  for  the  foregoing  reason. 

as  Kilbourn  v.  Thompson  (1880),  103  U.  S.  168,  at  p.  190. 


THE  NEW  LAND  POLICY  283 

different  view  expressed  by  him  could  be  considered  by  the 
Congress.  This  conclusion  is  reinforced  in  this  particular 
instance  by  the  refusal  of  Congress  to  ratify  the  action  of 
the  President,  and  the  enactment  of  a  new  statute  author- 
izing the  disposition  of  the  public  lands  by  a  method  essen- 
tially different  from  that  proposed  by  the  Executive." 

The  foregoing  analysis  of  the  two  opinions  will  indicate  that 
they  are  based  respectively  upon  fundamentally  different  concep- 
tions of  governmental  policy  as  embodied  in  the  federal  consti- 
tution. 

The  prevailing  opinion  rests  upon  the  conception  that  "gov- 
ernment is  a  practical  affair  intended  for  practical  men"  and  that 
the  federal  Constitution  should  be  construed  accordingly.  In- 
stances where  the  executive  branch  of  the  government  has  with- 
drawn lands  in  aid  of  governmental  functions,  either  expressly  or 
impliedly  sanctioned  by  congressional  action,  are  held  to  consti- 
tute a  precedent  and  to  create  a  power  by  implication  which  the 
President  admittedly  did  not  possess  originally  under  the  terms 
of  the  Constitution,  and  which  gives  him  the  authority  to  with- 
draw immense  tracts  of  public  domain,  in  aid  of  contemplated 
legislation,  from  the  operation  of  existing  acts  of  congress  spec- 
ifically providing  for  the  private  acquisition  of  such  lands.  To 
reach  so  liberal  a  conclusion  as  to  the  existence  of  this  executive 
power,  the  majority  of  the  court  were  unquestionably  influenced 
by  the  modern  conservation  policy  and  the  pressing  necessity 
for  immediate  action  in  the  effort  to  retain  under  public  control 
as  large  an  area  of  valuable  oil  lands  as  possible.  The  fact  that 
no  private  interest  existing  at  the  date  of  the  withdrawal  was 
affected,  was  also  a  potent  consideration.  Those  who  attempted 
to  secure  private  rights  thereafter  did  so  with  full  knowledge 
of  the  executive  withdrawal  and  acted  at  their  peril. 

On  the  other  hand,  the  dissenting  opinion  is  based  on  a 
strict  conception  of  the  distinct  spheres  of  action  of  the  three 
branches  of  the  government  and  the  danger  of  a  centralization  of 
power  in  the  executive  resulting  from  its  invasion  of  the  legiti- 
mate and  exclusive  functions  exercised  by  the  other  branches. 
Irrespective  of  the  beneficial  results  to  be  attained  by  the  con- 
summation of  federal  conservation  policies,  the  minority  mem- 
bers of  the  court  were  influenced  by  the  bald  proposition  that  the 
executive  in  withdrawing  all  of  the  lands  of  the  public  domain 


284  CALIFORNIA  LAW  REVIEW 

known  or  thought  to  be  valuable  for  oil36  was  virtually  nullifying 
and  suspending  the  operation  of  the  last  expressed  will  of  con- 
gress contained  in  its  positive  declaration  that  all  lands  valuable 
for  petroleum  shall  be  free  and  open  to  exploration  and  purchase 
by  citizens  under  the  placer  mining  laws. 

The  fact  that  the  executive  assumed  this  power  as  a  -esult 
of  a  conviction  that  new  laws  should  be  enacted  is  interesting 
to  note.  If  the  executive  can  suspend  the  operation  of  existing 
statutes  on  the  theory  that  they  are  detrimental  to  the  public 
interests  and  can  substitute  his  views  for  those  last  expressed 
by  congress,  even  if  only  temporarily,  there  may  arise  occasions 
where  this  power  might  be  exercised  in  hostility  to  what  may 
prove  to  be  the  public  interest.  It  was  to  avoid  just  such  con- 
tingencies that  the  strict  division  of  power  as  between  the  var- 
ious branches  of  the  government  was  originally  conceived  by 
the  framers  of  the  Constitution.  It  would  also  be  interesting  to 
know  how  long  the  executive  could  lawfully  suspend  the  opera- 
tion of  statutes  and  continue  such  suspension  in  force  in  the 
event  that  congress  did  not  see  fit  to  make  the  contemplated 
changes  in  the  existing  law.  Of  course,  the  answer  can  be  made 
that  congress  has  the  power  to  nullify  such  executive  action,  since 
it  retains  the  fundamental  and  exclusive  power  to  legislate  on 
such  subjects,  but  it  may  be  said  with  equal  force  that  congress 
is  in  session  during  a  large  portion  of  each  year  and  can  act  in 
the  original  instance  on  such  contemplated  proposals  and,  if 
deemed  expedient,  authorize  the  executive  to  make  necessary  with- 
drawals in  the  interim  in  order  to  preserve  the  status  quo.  This 
is  really  the  fundamental  difficulty.  Logically,  congress  is  the 
body  contemplated  by  the  Constitution  to  consider  and  originate 
legislation  and  make  radical  changes  in  existing  legislation  af- 
fecting the  public  lands,  but  as  a  matter  of  practical  operation, 
congress  has  become  to  a  greater  and  greater  degree  an  unwieldy 
body,  slow  to  consider  and  slower  to  act.  From  the  very  nature 
of  its  organization,  representing  as  it  does  such  radically  different 
viewpoints  on  most  of  the  problems  presented  for  its  consider- 
ation, it  is  prone  to  debate  rather  than  to  legislate.  This  has 


36  The  withdrawal  of  September  27,  1909,  "included  not  only  all 
known  California  oil  lands  ....  but  also  the  Wyoming  lands."  George 
Otis  Smith,  in  Senate  Public  Lands  Committee  hearings  on  Oil  Lands 
Leasing  Bill,  p.  209. 


THE  NEW  LAND  POLICY  285 

resulted  in  the  executive  stepping  in  and  usurping,  to  a  degree, 
certain  of  the  functions  unquestionably  vested  exclusively  in 
congress  by  the  federal  Constitution  if  interpreted  in  the  spirit 
which  actuated  its  framers.  This  has  become  notably  conspic- 
uous in  the  case  of  the  last  few  administrations  where  the  ex- 
ecutive branch  of  the  government  has  formulated  to  a  large 
degree  the  legislative  program,  prepared  to  the  letter  the  actual 
bills  proposed  for  passage,  and  employed  all  available  political 
pressure  to  insure  their  passage  in  their  original  form. 

We  are,  therefore,  confronted  with  an  actual  condition  which 
has  by  force  of  circumstances  compelled  a  material  deviation 
from  the  policy  outlined  by  the  framers  of  the  federal  Constitu- 
tion and  the  decision  in  the  Midwest  case  is  but  a  recognition  of 
this  change  and  of  the  exercise  of  increased  powers  by  the  ex- 
ecutive in  the  attempt  to  secure  a  greater  flexibility  of  action  and 
more  expeditious  results  than  it  is  at  present  possible  to  obtain 
from  the  ponderous  and  slow-acting  legislative  branch  of  the 
government. 

The  decision  in  the  Midwest  case  is,  therefore,  of  far  reaching 
importance,  since  it  sanctions  a  material  enlargement  of  federal 
executive  power  and  places  a  positive  stamp  of  approval  on  the 
new  public  land  policy.  Of  course,  congress  still  has  control 
over  the  ultimate  disposition  of  these  oil  lands  and  may  not  ac- 
cept the  proposed  executive  policy  as  to  future  legislation,  but 
the  trend  of  recent  events  practically  insures  adoption  of  the 
new  policy  either  in  whole  or  in  large  part. 

The  upholding  of  the  validity  of  the  Taft  oil  withdrawal  adds 
materially  to  the  importance  of  the  policy  which  will  control 
the  future  disposition  of  public  oil  lands.  As  already  pointed 
out,  the  conservation  policy  now  generally  accepted  involves  the 
idea  of  a  permanent  reservation  of  title  in  the  federal  government 
and  the  disposal  of  the  oil  under  a  leasing  system  on  a  royalty 
basis.37  A  bill  having  this  object  and  fostered  by  the  admin- 
istration was  before  the  last  congress  but  in  the  press  of  other 
legislation  failed  of  passage.38  A  similar  bill  is  likely  to  be  en- 


37  Legislation    of   this    character    has    been   urged    for   a    number   of 
years  by  the  department   of  the  interior.     See   the  Annual   Reports   of 
the   Secretary  of  the   Interior,  and   of  the   Director   of   the   U.   S.   Geo- 
logical Survey  for  the  past  few  years. 

38  The  fact  that  these  oil  lands  have  been  withdrawn  for  over  five 
years  and  that  congress  has  not  acted  yet  as  to  their  ultimate  disposi- 


286  CALIFORNIA  LAW  REVIEW 

acted  during  the  sixty-fourth  session  of  congress.39  In  his  re- 
port to  the  Public  Lands  Committees  of  congress40  Secretary  Lane 
states  that  this  bill  does  not  propose  any  change  in  the  laws 
governing  the  disposition  of  agricultural  lands  in  general ;  that, 
instead  of  conducting  a  "gigantic  land  lottery  under  goverr.ment 
auspices"  as  heretofore,  in  which  a  few  individuals  and  corpora- 
tions have  acquired  the  best  oil  and  coal  lands  for  little  or  nothing 
and  have  then  sold  the  product  back  to  the  public  at  arb  trary 
prices,  the  proposed  leasing  system  is  open  to  all  comers  who 
wish  to  prospect  and  develop  these  mineral  resources  on  fair 
terms  so  as  to  afford  a  fair  return  to  the  lessee  and  eliminate 
to  a  degree  the  element  of  speculation.41  He  points  out  the  fact 
that  the  oil  lands  in  private  ownership  are  now  largely  operated 
under  the  leasing  system  and  that  though  the  federal  government 
early  abandoned  a  system  of  leasing  lead  mines,  the  adverse  con- 
ditions there  encountered  do  not  exist  today  in  the  case  of  oil 
and  coal  lands.42 


tion  is  evidence  of  the  difficulty   of  securing  prompt   action   from   this 

body  on  most  subjects. 

"The  West  no  longer  urges  a  return  to  the  hazards  of  the  'land 
is  land'  policy.  But  it  does  ask  action.  It  is  reconciled  to  the 
Government  making  all  proper  safeguards  against  monopoly  and 
against  the  subversion  of  the  spirit  of  all  our  land  laws,  which  is  in 
essence  that  all  suitable  lands  shall  go  into  homes,  and  all  other 
lands  shall  be  developed  for  that  purpose  which  shall  make  them 
of  greatest  service.  But  it  asks  that  the  machinery  be  promptly 
established  in  the  law  by  which  the  lands  may  be  used.  And  this 
demand  is  reasonable."  Annual  Report  of  Secretary  of  the  Interior 
Lane  for  1913,  p.  3. 

39  H.  R.   16136.     An  act  providing  for  the  leasing  of  coal  lar  ds  in 
Alaska  became  a  law  Oct.  20,  1914.     U.  S.  Stats.  Ann.,  Jan.   1915  supp. 
p.  6.     By  private  resolution,  37  Stats,  at  L.   1346,  the  secretary  of  the 
interior  was  authorized  to  continue   the   operations   of  the   Owl    Creek 
Coal  Co.  in  Wyoming,  which  he  did  by  formal   lease.     See   Report   of 
the  Secretary  of  Interior   (1912),  pp.   10-11. 

40  63rd   congress,   3rd   session. 

41  In  a  letter  dated  May  1,  1914,  addressed  to  the  chairman  of  the 
Public   Lands   Committee   of  the   house,    Secretary   Lane   writes:     "The 
measure  deals  with   the  principal  fuel  and   fertilizer  minerals   found  in 
the  public  lands,  classes  of  deposits  in  which  the  people  generally  are 
particularly   interested,   and   which   should   be    so   handled   as   to   insure 
general  use  at  reasonable   rates.     It  would  be  unwise  to   permit   these 
resources  to  be  monopolized  or  gathered  into  private   ownership   of  a 
few  for  speculative  purposes". 

42  "The  leasing  method  of  disposition  is  about  as  fair  a  disposition 
as  we  can  expect  to  make  of  the  publicly  owned  lands,  not  simply  from 
the  standpoint  of  economics,  but  especially  from  the  standpoint  of  the 
public  interests  in  the  control  of  some  of  these  minerals  that  must  be 
considered    as    absolutely    necessary    to    the    industrial    life    of    today." 


THE  NEW  LAND  POLICY  287 

The  proposed  law  passed  the  House  and  as  finally  amended  in 
the  senate  Committee  on  Public  Lands,  provided  for  a  prospec- 
tor's permit  giving  an  exclusive  right  for  a  maximum  period  of 
two  years  to  prospect  for  oil  and  gas  upon  a  maximum  of  640 
acres  of  public  land  situated  not  less  than  two  nor  more  than 
ten  miles  from  any  producing  well,  or  a  maximum  of  2560  acres 
when  situated  over  ten  miles  from  such  a  well.  Drilling  opera- 
tions were  to  be  commenced  within  six  months,  500  feet  to  be 
drilled  in  one  year  and  2000  feet  in  two  years.  The  applicant  must 
comply  with  certain  formalities  of  marking  the  ground  and  post- 
ing notices,  and  the  drilling  operations  must  be  carried  on  as  pre- 
scribed. Upon  establishing  a  discovery  of  valuable  deposits  of 
oil  or  gas  the  permittee  becomes  entitled  to  a  patent  for  one-fourth 
of  the  area  embraced  within  the  permit. 

All  other  deposits  of  oil  and  gas  on  the  public  domain  are 
subject  to  lease  by  the  secretary  of  the  interior  through  competi- 
tive bidding,  each  tract  not  to  exceed  640  acres  and  such  leases 
to  be  conditioned  upon  the  payment  of  a  royalty  of  not  more  than 
one-eighth,  payable  in  oil  or  gas,  and  a  rental  of  not  less  than 
one  dollar  per  acre  per  annum  payable  in  advance  to  be  credited 
against  the  royalties  as  they  accrue  for  that  year.  The  term  of 
such  leases  is  to  be  twenty  years  with  preferential  right  of  re- 
newal for  successive  periods  of  ten  years.  The  maximum  lease- 
hold or  leaseholds  that  can  be  held  by  a  single  lessee  in  any  area 
of  fifty  miles  square  is  640  acres.43 

In  order  to  protect  those  oil  miners  who  were  affected  by 
the  executive  withdrawals,  it  is  provided  that  claimants  of  land 
in  which  oil  was  discovered,  or  drilling  operations  were  in  actual 
progress,  January  i,  1914,  and  the  claim  to  which  land  was 
initiated  prior  to  July  3,  1910,  may,  within  six  months  after  the 
passage  of  the  act  or  within  sixty  days  after  the  final  determin- 
ation of  the  right  to  a  patent,  relinquish  the  land  to  the  govern- 
ment and  receive  a  lease  therefor  upon  substantially  the  same  con- 
ditions as  other  lessees,  except  that  no  annual  rental  is  prescribed 
aside  from  the  royalties,  and  it  is  further  provided  that  where 
claimants  in  good  faith  located  lands  prior  to  withdrawal  thereof 
and  continued  to  occupy  the  same,  and  since  July  3,  1910,  have 


Hearings  on  Oil  Land  Leasing  Bill,  Public  Lands  Committee  of  senate, 
63rd  congress,  3rd  session,  pp.  216-217.  See  also  Classification  of  Public 
Lands,  Bulletin  537  U.  S.  Geological  Survey,  pp.  47-50. 

43  There  were  many  regulative  provisions  of  lesser  importance. 


288  CALIFORNIA  LAW  REVIEW 

diligently  prosecuted  work  looking  toward  a  discovery  and  have 
discovered  oil  prior  to  the  passage  of  the  act,  that  such  claim 
may  pass  to  patent  under  the  mining  laws.44 

The  secretary  is  authorized  to  dispose  of  the  surface  of  these 
lands  insofar  as  the  surface  is  not  necessary  for  the  use  of  the 
lessee.45  One  of  the  most  important  provisions  of  all,  requires  the 
payment  to  the  respective  states  wherein  the  leased  premises  are 
situated  of  fifty  per  cent  of  all  moneys  received  from  royalties  and 


44  On  March  2,  1911,  congress  passed  an  act  to  cure  a  questionable 
situation  arising  in  numerous  cases  where  an  individual  acquired  more 
than  20  acres  of  located  land  prior  to  discovery  of  oil,  (36  Stats,  at  L. 
1015).     This  act  was  amended  August  25,   1914,  38  Stats,  at  L.  708,  to 
authorize   the    secretary  of  the   interior  to   enter   into   agreements    with 
claimants  of  producing  oil  land  so  as  to  provide  for  the  disposition  of 
the  oil  pending  final  determination  of  the  title  of  the  land  where  this 
was   questioned   by   the   government. 

A  curative  act  applicable  to  phosphate  lands  located  prior  to  with- 
drawal was  approved  January  11,  1915,  and  provides  for  their  patenting 
under  the  placer  laws.  Where  a  lode  claim  conflicts,  no  placer  patent 
is  to  be  issued  until  the  adverse  lode  claim  is  abandoned,  presumably 
to  get  rid  of  any  possible  claim  of  an  extralateral  right. 

45  This  policy  of  severing  the  surface  from  the  subsurface  mineral 
deposits    and    disposing   of   each    separately   has   already   been   provided 
for  by  congress.     The  importance  of  this  step  was   recognized  ty  the 
director  of  the  U.  S.   Geological  Survey,  who  in  his  annual  report  for 
1911,  p.  10,  said:     "The  first  step,  both  in  principle  and  practice,  in  any 
amendment  of  the  land  laws,  appears  to  be  that  of  making  possible  by 
legislation   the   separation  of   surface   and   mineral   rights  whenever   the 
two    estates   have   values   which   can   be   separately   utilized".      See    also 
Bulletin   537,   U.    S.    Geological    Survey,    Classification   of   Public    Lands, 
pp.  46-47.  The  Act  of  July   17,   1914,  38  Stats,  at  L.   509,  provides  for 
the    issuance    of    patents    under    the    non-mineral    laws    of    the    United 
States  for  the  surface  of  withdrawn  lands  containing  phosphate,  nitrate, 
potash,    oil,    gas,    or    asphaltic    deposits,    with    a    reservation    to    the 
United    States    of    such    deposits,    together    with    the    right    to    pros- 
pect  for,   mine   and    remove    the   same   under   appropriate   federal    laws. 
The    right    to    occupy   the    necessary    surface    for    mining    operations    is 
also  reserved  and  payment  for  anv  damages  to  crops  and  improvements 
incident  to  such  operations  provided  for.     Agricultural  entries  of  surface 
lands    overlying   coal   deposits    are   permitted   in   the   Acts    of   March   3, 
1909.  35  Stats,  at  L.  844,  and  June  22,  1910,  36  Stats,  at  L.  583,  amended 
April  30,  1912,  37  Stats,  at  L.  105,  and  April  14   1914,  38  Stats,  at  U  335. 
The  Act  of  August  24,  1912,  37  Stats,  at  L.  497,  provides  for  the   agri- 
cultural entry  of  the  surface   of  oil  and   gas  lands  in  Utah.     The   Act 
of  February  27,  1913,  37  Stats,  at  L.  687,  provides  for  the  selection  by 
the   state   of   Idaho   of  the   surface   of  oil   and   phosphate   lands.     This 
policy  of  severing  the  surface  from  the  mineral  rights  and  treating  each 
as   distinct   properties   is   unquestionably  the   ideal   system   of   land   and 
mining  law,  for  the   surface  and  the  underlying  minerals  can   in   most 
cases   be    disassociated   and   the   surface  used   for   agricultural    or   other 
non-mineral  pursuits  with  of  course  the  reservation  of  the  right  to  use 
enough   of   the    surface   as   may  be   essential   to   mining   operations   and 
provision    made    for    the    payment    of   damage    suffered    by   the    surface 


THE  NEW  LAND  POLICY  289 

rentals,46  the  other  half  going  into  the  reclamation  fund.  This 
provision  is  inserted  in  order  to  appease  the  strong  western  senti- 
ment antagonistic  to  the  permanent  retention  by  the  federal  govern- 
ment of  the  proprietary  control  of  these  immense  areas  of  land 
wealth.47  That  this  sentiment  has  a  valid  basis  is  apparent  from 
the  mere  statement  of  the  fact  that  millions  of  acres  of  land 
containing  fabulous  values  of  timber,  coal,  oil,  water-power  etc. 
are  to  be  administered  by  the  federal  government  to  the  exclu- 
sion of  the  states  within  which  these  resources  exist,  whereas 
all  of  the  eastern  states  and  most  of  the  states  of  the  middle 
west  do  possess  and  exercise  this  exclusive  sovereign  control 
over  all  of  the  lands  and  resources  within  their  respective  bor- 
ders, and  enjoy  the  salutary  results  flowing  from  such  complete 
exercise  of  sovereignty.  These  western  states  are  facing  a  ser- 
ious curtailment  of  sovereign  power  which  places  them  on  a  dis- 
tinct plane  of  inequality.  Here  again,  if  this  federal  policy  is  to 
become  a  permanent  one,  as  there  is  every  reason  to  believe,  our 
primary  conceptions  of  the  status  of  the  western  states  which  were 
to  be  admitted  to  the  Union  upon  terms  of  exact  equality  with 
all  the  other  states  and  were  to  enjoy  equal  privileges  must  suffer 
a  profound  adjustment  to  harmonize  with  these  new  conceptions. 

claimant.  This  separation  of  these  rights  is  in  line  with  true  conserva- 
tion, since  it  permits  of  "the  utilization  of  lands  for  their  greatest 
value".  Many  of  the  continental  systems  of  mining  law  provide  for 
this  severance  and  it  is  unfortunate  that  the  United  States  should  not 
have  earlier  recognized  its  ultimate  importance. 

46  As    to    this    proposal,    Secretary    Lane    says:     "Inasmuch    as    the 
title  to  these  oil  or  other  lands  would  remain  in  the  Government  and 
be  excluded  from  State  taxation,  it  would  seem  to  be  fair  that  a  certain 
percentage    of   the   royalties    received   should   go   to   the    States   within 
which  the  revenues  are  raised".     Report  to  Public  Lands  Committee  of 
Congress. 

The  Senate  Committee  on  Public  Lands  reports:  "This  is 
deemed  a  just  recognition  of  the  rights  of  the  States  in  and  about 
the  public  domain  situated  within  their  borders  and  the  right  of  a 
State  to  receive  therefrom  some  revenue  and  benefit  to  go  toward 
maintenance  of  State  Government".  Report  on  H.  R.  16136,  p.  7. 

47  This  western  attitude  is  strongly  voiced  by  Justice  Henshaw  who 
wrote    the    opinion    in    Deseret    Water,    Oil,    etc.    Co.   v.'    State    of    Cali- 
fornia (1914),  167  Cal.  147,  a  case  decided  in  bank  and  where  the  follow- 
ing language  appears: 

"But  here  we  desire  to  point  out  that  while  the  state  of  Cali- 
fornia was  admitted  as  a  sovereign  state  of  the  Union  upon  equal 
terms  with  all  the  other  states,  and  while  it  has  been  judicially 
declared  that  an  essential  part  of  that  equality  is  the  disposition  of 
the  public  lands  within  the  state,  to  the  end  that  the  revenues  by 
taxation  therefrom  and  the  control  over  them  may  be  vested  in  the 
state,  we  have  in  California  a  withdrawal  by  the  United  States  from 
sale  and  a  placing  in  reserves  of  one-third  of  the  area  of  the 


290  CALIFORNIA  LAW  REVIEW 

This  is  a  question  of  the  interpretation  to  be  placed  on  the  pro- 
visions of  the  federal  Constitution  which  bear  on  the  creation  of 
new  states,  their  status  and  relation  to  the  other  states.  If  we 
take  the  decision  in  the  Midwest  case  as  evidence  of  the  recent 
trend  of  opinion  entertained  by  a  majority  of  the  federal  Supreme 
Court,  we  can  almost  certainly  conclude  that  when  this  basic 
question  of  State  v.  Federal  Rights  is  presented  to  that  court 
for  decision,  it  will  not  consider  itself  bound  by  strict  letter,  but 
will  interpret  the  Constitution  broadly  and  in  the  light  of  the 
recent  public  attitude  toward  conservation  problems  in  general, 
and  will  again  recognize  the  doctrine  that  "government  is  a  prac- 
tical affair  intended  for  practical  men".48  The  question  is,  after 
all,  an  eminently  practical  one,  involving  as  it  does  profound  econ- 
omic and  social  problems,  and  not  only  a  readjustment  of  the 
relations  of  the  individual  toward  the  resources  of  the  public 
lands,  but  also  a  readjustment  of  the  respective  spheres  within 
which  the  state  and  the  federal  governments  shall  operate.49 

This  new  public  land  policy  certainly  marks  a  decided   step 
in  the  direction  of  centralization  of  power  in  the  federal  gevern- 


whole  state — an  area  greater  than  the  combined  territory  of  New 
Hampshire,  Vermont,  Massachusetts,  Connecticut,  Rhode  Island, 
New  Jersey,  and  Maryland.  Not  this  alone,  but  we  have  in  these 
withdrawals  a  refusal  upon  the  part  of  the  United  States  to  yield 
to  the  state  of  California  control  over  its  natural  sources  of 
wealth.  Its  forests,  its  mines,  its  oil-bearing  lands,  its  power 
sites  and  possibilities,  have  been  withheld  by  the  United  States, 
which  proposes  to  exercise  over  them,  and  is  exercising  over  them, 
the  "municipal  sovereignty"  which  the  supreme  court  of  the  United 
States  in  Pollard's  Lessee  v.  Hagan  declared  not  to  exist.  If  at  the 
time  of  the  proposed  cession  of  its  lands  by  Virginia,  Congress 
had  declared  its  intent  to  be  that  which  it  has  actually  executed  in 
the  state  of  California,  little  doubt  can  be  entertained  as  to  the  jnswer 
which  Virginia  would  have  made.  It  is  indeed  a  departure  from 
the  accepted  construction  of  these  constitutional  provisions  to  have 
it  said  that  the  United  States  may,  as  here,  withdraw  from  state 
use  one-third  of  the  area  of  a  sovereign  state,  forever  deny  to  the 
state  the  sovereign  power  of  taxation  and  control  over  these  lands, 
and  develop  and  exploit  them  under  its  own  rules  and  regulations 
for  the  enrichment  of  its  own  treasury." 

48  In  fact  the   Supreme   Court  of  the  United   States  in  the   case   of 
Light  v.  United  States  (1911),  220  U.  S.  523,  31   Sup.  Ct.   Rep.  ^85,  55 
L.  Ed.  570,  has  already  intimated  that  congress  may,  in  the  fullness  of 
its  power  of  disposal  over  the  public  lands,  and  acting  for  the  nation 
as  proprietor  and  owner,  withhold  from  sale  and  settlement  and  place 
in  a  state  of  permanent  reservation  such  lands  as  it  mav   in  the  exercise 
of  its  discretion,  deem  necessary  for  national  and  public  purposes. 

49  The  fact  that  these  problems  are  largely  social  and  economic  and 
are    tendencies    represented    on    the    one    hand    by    advocates    of    "col- 
lectivism" or  "advanced  socialism"  as  opposed  to  the  more  conservative 


THE  NEW  LAND  POLICY  291 

ment  which  was  not  within  the  contemplation  of  its  framers, 
but  which  policy  its  proponents  contend,  with  considerable  reason, 
can  be  more  satisfactorily  and  efficiently  administered  through 
national  rather  than  state  control.50 

Wm.  E.  Colby. 
Berkeley,   California. 


"individualists",  was  presented  in  a  clear  analysis  of  these  opposing 
views  by  Judge  Curtis  H.  Lindley  in  April,  1910,  at  a  meeting  of  the 
San  Francisco  Bar  Association  in  an  address  entitled  "Conservation  of 
Natural  Resources  and  its  possible  Effect  on  Mining,  Irrigation  and 
Hydro-Electric  Industries".  He  said: 

"It  is  manifest  that  we  are  on  the  eve  of  a  new  dispensation,  a 
new  order  of  things,  and  that  it  is  time  we  should  examine  into  the 
prospective  operation  of  these  'policies'  when  crystallized  into 
statutory  enactments  at  the  hands  of  the  national  legislative  body. 
....  The  subject  is  a  monumental  one;  presenting,  in  my  judg- 
ment, some  of  the  greatest  problems  which  are  to  be  solved  by  the 
present  generation  of  lawyers,  judges  and  constructive  statesmen." 

50  Hon.  Walter  L.   Fisher,  when  secretary  of  the  interior,   had  the 
following  to  say  on  this  general  subject: 

".....  the  ordinary  citizen  of  these  [western]  states — are  not  at 
all  concerned  over  Federal  usurpation  or  unjust  treatment.  They 
recognize  that  the  Federal  Government  has  full  legal  power  to 
dispose  of  the  public  domain  as  wise  policy  may  direct. 

"They  do  not  fear  Federal  usurpation,  but  seek  Federal  co-opera- 
tion in  supplementing  State  and  local  powers,  so  that  the  natural 
resources  shall  be  utilized  for  the  public  benefit  primarily  of  the 
locality  in  which  these  resources  are  situated,  and  thus  ultimately 
for  the  benefit  of  the  Nation  as  a  whole.  They  suspect  that  the 
real  purpose  of  those  who  urge  the  turning  over  of  the  Federal 
domain  to  the  States  is  that  they  may  escape  the  longer  and  the 
stronger  arm  of  the  Federal  Government  and  may  take  advantage 
of  the  more  limited  resources  and  governmental  facilities  of  the 
individual  States.  While  some  States  have  undoubtedly  wisely 
conserved  certain  of  the  lands  and  natural  resources  turned  over  to 
them  by  the  Nation,  the  story  has  too  often  been  the  acquisition 
of  these  lands  and  resources  by  special  interests  or  individuals 
without  adequate  recognition  of  the  public  interest.  There  is  no 
policy  which  it  would  be  wise  for  any  State  to  adopt  with  respect 
to  these  matters  in  the  adoption  and  enforcement  of  which  it  can 
not  be  supplemented  and  assisted  rather  than  retarded  by  the 
retention  in  Federal  hands  of  the  powers  and  the  property  now 
held  by  the  Nation.  It  is  precisely  this  policy  of  practical 
co-operation  which  should  be  put  into  effect. 

"There  is  no  real  conflict  between  the  Nation  and  the  States 
upon  this  subject.  In  fact,  there  can  be  no  real  solution  of  these 
aspects  of  the  problem  until  the  interests  and  the  functions  of  the 
Nation  and  the  States  are  co-ordinated  and  they  are  working 
together  for  the  same  essential  ends."  Report  of  the  Secretary  of 
the  Interior  (1912),  pp.  20-21. 


292  CALIFORNIA  LAW  REVIEW 

A  similar  policy  has  been  suggested  in  Great  Britain  with  reference 
to  some  of  these  same  resources  particularly  coal.  This  has  been 
entitled  the  "Nationalization  of  Minerals"  and  means 

"the  acquisition  by  the  State  of  the  whole  of  the  minerals  of 
the  country  whether  worked  at  the  present  time  or  not,  and  the 
holding  of  them  for  the  benefit  of  the  community."  Even  the 
"Nationalization  of  Land"  has  been  proposed. 

Lacking  the  public  domain  of  this  country  the  movement  then  is 
seriously  handicapped  since  it  means  exclusively  condemnation  and 
purchase  of  private  rights  or  confiscation.  Final  Reports  of  the  Royal 
Commission  on  Mining  Royalties,  pp.  46-47,  1893. 


HE  FREEDOM  OF  THE  MINER  AND  ITS 
INFLUENCE  ON  WATER  LAW 

BY  WILLIAM  E.  COLBY 


REPRINTED  FROM 

LEGAL  ESSAYS  IN  TRIBUTE  TO  ORRIN  KIP  McMuRRAY 
(UNIVERSITY  OF  CALIFORNIA  PRESS — 1935) 


THE  FREEDOM  OF  THE  MINER  AND  ITS 
INFLUENCE  ON  WATER  LAW 

BY  WILLIAM  E.  COLBY 


REPRINTED  FROM 

LEGAL  ESSAYS  IN  TRIBUTE  TO  ORRIN  KIP  McMuRRAY 
(UNIVERSITY  OF  CALIFORNIA  PRESS — 1935) 


THE  FREEDOM  OF  THE  MINER  AND  ITS 
INFLUENCE  ON  WATER  LAW 

BY  WILLIAM  E.  COLBY 

MINING  HAS  HAD  A  PROFOUND  INFLUENCE  Oil  the  laWS  and  Social 
usages  of  the  communities  throughout  the  world  where  min- 
ing has  flourished.  The  available  record  of  the  mining  laws 
of  different  countries  throughout  the  ages  establishes  the  fact  that  there 
is  a  remarkable  uniformity  of  underlying  principle  in  these  usages  and 
customs.  In  very  ancient  times  mining  was  carried  on  as  a  sovereign 
venture  or  concession  and  as  a  consequence  laws  governing  mining  in 
those  days  were  practically  non-existent.  It  was  only  with  the  advent 
of  the  autocratic  democracy  created  by  the  Athenians  that  individual 
mining  assumed  any  considerable  importance.  The  silver  mines  of 
Laurium  were  divided  into  small  tracts  and  leased  to  individuals  or 
groups  of  citizen  adventurers.1 

Under  Roman  rule  there  was  a  partial  emergence  of  the  right  of  the 
individual  to  mine  on  his  own  account.  The  Romans  were  not  as  a  rule 
skilled  in  the  art  of  mining.  They  therefore  found  it  more  expedient  to 
allow  the  peoples  whom  they  had  conquered  to  continue  mining  oper- 
ations in  accordance  with  local  customs  and  to  exact  a  tribute  or  royalty 
from  them.  Certain  Roman  emperors,  in  order  to  increase  this  flow  of 
wealth  into  Roman  coffers,  distinctly  encouraged  the  leasing  of  min- 
ing claims  by  individual  adventurers. 

In  the  tide  "De  Metallariis"  of  the  Code  of  Justinian  was  found  the  con- 
stitution of  Valentinian,  by  which  any  one  was  permitted,  and  invited,  to 
become  an  aurilegulus,  and  to  work  for  his  own  profit,  on  the  condition  of 
rendering  a  certain  metallic  canon,  and  of  selling  the  produce  to  the  fisc  in 
preference  to  others.2 

GERMANY  :  Out  of  the  darkness  and  welter  of  the  Middle  Ages,  impor- 
tant institutions,  social  and  governmental,  were  born  and  many  of  their 
essential  principles  can  be  traced  down  to  the  present  day.  During 
these  medieval  times  mining  became  of  increasing  importance,  par- 
ticularly in  the  Germanic  states.  The  German  miners  were  exception- 


68  William  E.  Colby 

ally  proficient  in  the  art  of  mining  and  their  services  vere  in  demand 
in  many  parts  of  the  civilized  world.  The  first  edition  of  Agricola's 
comprehensive  treatise,  De  Re  Metallica,  was  published  in  Germany  in 
1555  and  is  a  veritable  encyclopedia  of  the  then  existing  phases  of  the 
mining  industry.3 

In  this  same  medieval  period  the  miner  acquired  a  considerable 
measure  of  freedom  (Bergbaufrciheit,  to  use  the  German  expression). 
This  is  all  the  more  remarkable  when  we  remember  the  bondage 
which  the  feudal  system  at  that  time  imposed  upon  •  he  farmer  and 
ordinary  laborer,  who  were  serfs  in  every  sense  of  the  word.  Writers 
differ  as  to  just  how  this  mining  freedom  came  about.  Some  contend 
that  the  miners  themselves  threw  off  the  shackles  of  serfdom,4  but  the 
more  conservative  view  is  that  the  miners  constituted  a  skilled  class 
with  special  knowledge  of  an  art,  the  practice  of  which  brought  large 
royalties  to  the  overlords  and  feudal  rulers.  In  order  to  attract  and  en- 
courage miners  to  work  in  a  particular  area  that  they  might  thus  re- 
ceive the  royalties  paid  on  the  metals  mined,  these  overlords  vied  with 
one  another  in  issuing  liberal  charters  under  which  the  miners  op- 
erated. 

The  princes  of  Germany  imitated  the  policy  of  the  Romtn  emperors,  and 
invited  adventure  by  indefinite  liberty  of  search  on  terms  which  gave  to  the 
adventurers  a  strong  interest  in  their  success.  This  liberty  (the  Freier^ld- 
rung  of  the  German  mines)  is  indicated  obscurely  in  the  Iglavian  mine 
laws  of  the  thirteenth  century;  more  distinctly  in  those  of  Wenceslaus  the 
Second;  and  the  system  received  its  full  development  in  the  fifteenth  and 
sixteenth  centuries.  By  the  general  practice  of  that  country,  every  one  is 
entitled  to  a  provisional  right  of  search  within  certain  limhs.5 

Medieval  mining  was  largely  carried  on  in  uncultivated  and  moun- 
tainous districts,  on  lands  claimed  by  the  overlords. 

While  the  miners'  right  to  enter  upon  this  waste  land  and  stake  out 
and  work  mining  claims  was,  in  the  Middle  Ages,  largely  controlled 
by  charters  issued  by  the  local  rulers,  it  is  also  true  tha;  the  provisions 
of  these  charters  were  based  upon  and  chiefly  reflected  the  customs  and 
usages  of  the  miners  themselves.6  This  is  true  also  of  mining  in  other 
parts  of  the  world.  The  miner,  having  developed  a  special  art,  the  suc- 
cessful exercise  of  which  he  alone  could  carry  on,  was  able  to  impose 


The  Freedom  of  the  Miner  and  Water  Law  69 

customs  and  usages  of  his  own  making  upon  his  superiors  in  power, 
who  accepted  this  measure  of  dictation  because  of  the  financial  bene- 
fits accruing  to  them  through  payment  of  royalties. 

One  of  the  conspicuous  rights  asserted  by  these  early  miners  in  the 
Middle  Ages  was  freedom  to  go  upon  "common"  or  "wastrel"  lands 
and  to  stake  out  claims,  the  right  to  work  which  was  recognized  both 
by  charter  and  by  custom  as  the  miners'  individual  property.7  The  free 
miners  in  Germany,  France,  and  Great  Britain  not  only  had  a  right  to 
mine  on  these  lands,  but  also  were  entitled  to  the  use  of  rights  of  way, 
timber,  fuel,  and  water,  space  for  buildings,  and  refineries.  They  were 
exempted  from  various  tolls,  taxes,  and  duties,  from  military  service, 
from  obligations  of  a  servile  tenure  or  condition,  and  from  disability 
and  forfeiture  by  reason  of  alienage.  They  were  also  provided  with 
local  officers  and  courts  for  the  administration  of  justice.  There  was 
special  protection  of  person  and  property.8  As  long  as  the  miner  com- 
plied with  the  usages  and  customs  of  the  district,  he  had  the  right  to 
mine  his  own  claim  to  the  exclusion  of  all  other  persons  and  the  right 
to  the  product  of  his  industry  subject  only  to  payment  of  the  royalty. 

Upon  the  discovery  of  a  vein  or  other  mineral  deposit,  he  is  entitled,  as 
of  right,  to  a  grant  of  a  certain  measured  space  of  ground  for  the  purpose  of 
pursuing  his  discovery;  and  the  ceremony  of  bounding  this  area  is  an- 
nounced by  three  consecutive  proclamations.  The  demand  made  upon  the 
Bergmeister,  or  other  local  officer  of  the  sovereign,  cannot  be  refused  unless 
there  be  conflicting  claims,  in  which  case  the  first  finder,  and  not  the  first 
claimant,  is  entitled  to  preference.  The  interest  of  the  concessionary  is  per- 
manent, assignable,  and  transmissible;  but  is  subject  to  the  obligation  of 
continual  working,  of  payment  of  the  tenth  or  other  proportion,  and  of  a 
small  fixed  quarterly  rent.9 

Ordinarily,  it  is  true,  he  exercised  this  right  under  the  general  terms 
of  a  charter  or  other  proclamation  issued  by  the  ruler  in  control  of  the 
land  in  question,  and  the  important  point  to  bear  in  mind  is  that  the 
overlord,  by  granting  this  free  right  to  go  upon  waste  lands  and  stake 
out  claims,  had  yielded  up  the  ordinary  privilege  of  an  owner  of  real 
property  to  select  and  designate  the  particular  person  who  might  ac- 
quire such  rights;  in  other  words,  the  right  of  personal  selection  of  the 
individual  grantee  was  waived.  The  overlord  no  longer  dictated  and 
determined  who  the  particular  individual  should  be  who  might  mine 


TO  William  E.  Colby 

a  specific  parcel  of  his  land.  This  right  of  free  mining  subsequently 
spread  into  other  parts  of  the  world  and  eventually  was  exercised  on 
our  own  federal  public  domain  in  the  mining  regions  of  the  West  fol- 
lowing the  discovery  of  go1  d.10 

As  soon  as  the  door  was  thrown  open  so  that  qualifie  d  miners  could 
freely  locate  individual  claims  on  waste  lands,  it  became  essential  to 
determine  their  respective  rights  as  among  themselves  in  order  to  pre- 
vent inevitable  conflict.  Virtually  all  systems  of  mining  law  in  which 
the  individual  or  claim  system  of  location  prevails,  early  recognized  as 
a  cardinal  principle  the  superior  right  of  the  first  locator  or  appropri- 
ator  in  time.  This  is  variously  referred  to  as  the  "Doctrine  of  Priority" 
or  "Law  of  the  First  Finder."11  Qui  prior  est  in  tempos,  potior  est  in 
jure,  was  the  Roman  wording  of  this  equitable  doctrin:. 

The  same  principle  of  "prior  appropriation"  was  quite  naturally  ap- 
plied by  the  Germanic  miners  in  their  customs  govern  :ng  the  acquisi- 
tion of  water  for  use  in  the  mines.  Most  mining  operations  require  a 
considerable  use  of  water  and  the  greater  number  of  mines  are  not  so 
situated  that  the  use  of  this  water  can  be  enjoyed  through  the  ordinary 
exercise  of  a  riparian  right.  The  water,  in  order  to  be  beneficially  en- 
joyed, must  of  necessity  be  diverted  from  the  stream  and  conducted  to 
the  nonriparian  mining  land  where  it  is  needed. 

The  early  German  mining  law,  which  in  the  majority  of  its  main 
principles  resembles  the  original  German  general  law,  from  the  begin- 
ning guaranteed  to  the  mine  operator  free  use  of  the  flowing  water.12 

The  necessity  of  the  use  of  water  for  mining  purposes,  and  the 
fact  that  mining  first  occurred  in  uncultivated  and  unc  ivided  districts 
(MarJ(s)  and  in  royal  and  feudal  forests,  explain  two  later  facts:  (i) 
that  the  free  use  of  water  and  pasturage  was  given  to  the  mine  oper- 
ators as  well  as  to  the  members  of  the  Mark  Association  and  (2)  that 
the  right  to  the  free  use  of  water  continued  in  special  recognition  of 
the  economic  importance  of  mining  when  mining  entered  upon 
ground  which  had  already  become  private  property  and  when  the  gen- 
eral law  enacted  into  statute  no  longer  recognized  a  free  use  of  flowing 
water.  The  older  mining  rules  (Bergfreiheiten)  permit  no  doubt.  Thus 
we  read  in  the  Bergfreiheit  for  the  silver  mine  at  Fischbach  of  the  year 
1426  (Lori,  p.  27) : 


The  Freedom  of  the  Miner  and  Water  Law  71 

All  our  forests  and  waters,  wherever  situate  and  suitable  for  mining  pur- 
poses, shall  at  all  times  be  free  and  open. . . . 

The  Bergfreiheit  for  Fischbachau  for  the  year  1446  (Lori,  p.  32) 
granted  the  miners  "dwelling  and  pasturage,"  for  their  cattle,  also 
wood,  water,  roads,  and  pathways  "if  the  same  are  of  use  and  con- 
venience." 

In  the  Bergfreiheit  for  Kutzbuchel,  Ratenberg,  etc.  1459,  Section  8, 
it  was  provided : 

We  allow,  grant  and  confirm  the  mines  and  minerals  wherever  the  same 
may  be  found  and  worked,  in  the  herein  mentioned  dominions  and  assizes, 
together  with  forests,  mining  claims  [Hiittslegen],  pathways,  roads,  water 
and  stone  and  all  other  things  as  are  usually  appurtenant  to  mines. 

Compare  Section  8  of  the  Bergfreiheit  for  Lam  (Lori,  p.  65).  Berg- 
freiheit of  The  Duchy  of  Braunschweig  for  Gittelde,  Grund,  and  Zel- 
lerfeld  of  1532  (Calvor,  p.  218) : 

From  the  beginning  to  all  our  subjects  throughout  our  domain  and 
duchy  all  our  mining  roads,  ways,  and  footpaths  shall  be  free  and  open, 
together  with  water  for  smelters  and  stamp  mills  and  all  other  works,  ac- 
cording to  the  mining  law  and  custom  from  time  immemorial. 

Bergfreiheit  of  the  Mar\  Brandenburg  of  the  year  1539  (Wagner, 
p.  421): 

We  give  and  grant  to  them  herewith  the  right  and  privilege  to  enjoy, 
have  and  use  our  forests  and  water.  We  concede  and  grant  for  ourselves, 
our  heirs  and  our  sovereignty  to  each  and  all  of  them,  our  lands  and  estate 
and  the  right  to  go  upon  the  mines,  mills,  forests  and  waters,  to  ride  or  drive 
upon  now  and  forever  more. 

Bergfreiheit  ojNassau-Katzenemb  of  the  year  1559  (Brassert,  p.  9) : 

Those  who  come  to  dwell  among  us  for  mining  purposes  shall  hold  freely 
and  unhindered  in  common,  water,  pasturage,  streets,  footpaths  and  roads 
(excepting  fisheries  and  hunting  grounds),  according  to  the  mining 
custom. 

Bergfreiheit  ofKurtrier  of  the  year  1564  (Brassert,  p.  101)  : 

We  grant  to  the  miners  in  the  designated  district  the  right  to  use  the 
water,  pasturage,  to  hunt  rabbits,  to  shoot  and  fish,  and  therefore  that  all 
roads,  water,  pasturage  and  foot  paths  shall  be  free,  except  that  we  reserve 
to  ourselves  certain  hunting  grounds  and  fishing  waters. 


72  William  E.  Colby 

These  examples  show  that,  as  a  part  of  the  Bergfreihe^ten  (free  min- 
ing privileges),  the  free  use  of  flowing  water  was  maintained  for 
mining,  or  at  least  that  in  the  common  Marf^  (district)  and  in  the 
manors  the  right  to  the  free  use  of  water,  which  had  existed  from  time 
immemorial  in  favor  of  mining,  was  recognized  and  declared  ap- 
plicable. 

Just  as  the  right  to  mine  minerals  found  in  open  lane,  was  acquired 
by  the  individual  miner  by  priority  of  location,  so  the  custom  similarly 
arose  of  acquiring  the  use  of  water  for  mining  purposes  by  prior  ap- 
propriation. Neither  the  lord  of  the  manor  nor  the  owner  of  the 
ground  had  any  right  to  dispute  the  acquiring  of  such  right  to  the  use 
of  water  by  the  miner.  This  right  of  the  miner  to  appropriate  water 
establishes  the  fact  that  the  owner  of  land  riparian  to  the  flowing  water 
did  not  have  an  exclusive  use  of  such  water  but  had  i.o  yield  to  the 
miner. 

The  one  who  received  a  grant  of  the  right  to  use  w£  ter  had  either 
to  dam  up  the  water  or  divert  it  within  a  period  of  ore  half-year.  If 
this  was  not  done,  or  if  the  water  conduits  were  allowed  to  deteriorate 
for  a  half-year,  then,  after  such  fact  had  been  established,  other  persons 
might  be  granted  the  water.  These  provisions  were  not  applicable  to  a 
proprietor  of  a  mine  which  produced  its  own  water,  for  he  did  not 
need  to  obtain  a  grant  of  a  water  right :  they  applied  only  to  such  users 
of  water  as  required  a  grant. 

All  those  waters  which  were  discovered  by  means  of  tunnels,  shafts, 
prospect  works,  or  ditches,  were  to  be  granted  by  the  Bergmeister  to 
those  who  had  appropriated  them  or  taken  possession  of  them,  but 
always  with  the  restriction,  namely,  that  such  grant  of  such  water 
should  not  interfere  with  the  mine  or  the  mine  workings  of  the  district, 
and  that  the  miners  might  at  all  times  use  the  same  for  the  dressing  of 
ores,  if  the  necessity  arose.13 

Wells  and  springs  as  a  general  rule  were  not  objects  of  grant  by  the 
Bergmeister.  The  right  to  the  use  of  water  in  creeks  and  rivers  for 
mining  purposes,  on  the  contrary,  was  acquired  by  appropriation  and 
grant.  If  the  use  of  the  water  had  already  been  granted  "o  a  third  per- 
son, and  the  latter  had  constructed  special  works  for  the  use  of  the 
same,  nevertheless,  mining  took  precedence.  If  no  appropriation  and 


The  Freedom  of  the  Miner  and  Water  Law  73 

grant  of  the  water  in  streams  and  rivers  had  occurred,  either  according 
to  law  or  to  custom,  nevertheless,  according  to  the  Bergfreiheiten  and 
the  common  mining  laws,  mining  had  the  preferential  right  to  the  use 
of  such  water.  Water  in  streams  and  rivers,  in  contrast  to  mine  waters, 
could  only  be  acquired  for  mining  purposes  by  appropriation  and 
grant  of  the  Bergmeister.1* 

The  other  mines  and  newly  discovered  claims,  of  whatever  sort  they  may 
be,  whether  old  workings  or  newly  discovered,  which  are  situated  within 
the  boundaries  of  our  Niederoester  lands  and  therein  opened  up,  together 
with  rivers,  coal  lands,  and  forests,  are  to  be  granted  by  our  mining  author- 
ities, representing  us,  and  by  no  one  else.15 

The  flowing  brooks  and  waters  are  not  to  be  granted  or  given  as  ex- 
clusive property  to  anyone,  but  such  waters  are  always  to  be  used  for 
those  purposes  which  chiefly  promote  and  maintain  mining,  such  as 
Heintzen  (bucket  pumps)  and  Kunsten  (Hertwig,  Bergbuch,  p.  249, 
defines  these  as  machines  for  raising  or  pumping  water  out  of  mines), 
regardless  of  stamp  mills,  lumber  mills,  hydraulic  machines,  etc.18 

If  a  water  power  is  still  open  to  appropriation  and  we  have  no  right  our- 
selves to  build  a  stamp  mill  upon  it,  and  such  water  power  does  not  inter- 
fere with  other  stamp  mills,  then  our  Oberbergmeister  may  grant  such 
water  power  to  the  next  one  who  makes  application  therefor,  etc.17  (This 
coincides  in  the  main  with  the  Schlackenwalder  Tinn  ordinance.) 

In  conformity  with  the  tradition  of  his  office  (Oberbergmeister)  and 
that  which  we  permit  him  to  do,  the  Oberbergmeister  shall  grant  and 
confirm  to  those  who  desire  to  develop  them,  mines,  tunnels,  water 
powers,  stamp  mills,  smelter  works,  forges  (Hammer),  saw  mills,  and 
the  like.18 

The  provisions  of  the  Prussian  Allgemeines  Landrecht,  although 
somewhat  obscure,  reflect  the  foregoing  provisions  and  customs  con- 
cerning the  use  of  water  in  brooks  and  rivers  for  mining  purposes.  The 
material  portions  of  the  Landrecht™  entitle  one  to  conclude  that  the 
old  law  was  intended  to  be  retained,  as  is  evidenced  by  the  following 
provisions  (Part  II,  Tit.  16,  Sec.  80) : 

Washworks  (dressing  works)  and  stamp  mills,  as  well  as  ditches  and 
water  conduits  on  the  surface,  are  not  included  in  the  location  of  a  mine, 
but  must  be  separately  appropriated  and  granted.  (Waters  of  operating 


74  William  E.  Colby 

mines  [mine  waters],  for  the  use  of  which,  according  to  the  German  min- 
ing law,  the  mine  proprietor  does  not  require  a  grant,  constitute  an  ex- 
ception.) 

Even  Section  no:  "Ponds  and  mills  must  also  give  \vzy  to  mining,  if 
it  is  necessary  for  the  further  prosecution  thereof,"  accords  with  the 
former  law,  since  the  latter  law  prescribed  the  compensation  to  be  paid 
to  the  one  who  was  formerly  entitled  to  the  water.  Section  109,  accord- 
ing to  which  the  owner  of  the  soil  is  obliged  to  surrender  to  mine  pro- 
prietors, "the  water  necessary  for  the  operation  of  mine  engines,  stamp 
mills,  dressing  works  and  smelters,"  does  not  follow  the  old  law  since, 
under  the  new  law,  according  to  Section  112,  there  mu<t  be  compensa- 
tion for  every  surrender  of  a  water  right. 
The  Austrian  Mining  Law  of  May  23, 1854,  Section  105,  provides: 

Surface  waters  which  are  necessary  for  carrying  on  mining  must  even 
against  the  will  of  the  owner  be  surrendered  to  the  Reviei  stollner  even  by 
other  mine  owners,  so  far  as  water  police  regulations  and  other  public  con- 
siderations do  not  stand  in  the  way  and  the  desired  surrender  of  the  water 
results  in  greater  national  economic  advantages . 

In  respect  to  mine  waters,  the  same  law  in  Section  128  materially  fol- 
lows the  older  law.  Such  waters  are  reserved  to  the  mine  owner  for 
mining  and  smelting  purposes,  but  may,  however,  under  certain  pro- 
visions be  granted  to  third  persons  "for  any  purpose  whatever."  The 
mine  owner  is  not  responsible  for  any  changes  in  the  quantity  of  the 
mine  water  flowing  out  of  the  mine. 

The  mining  law  of  the  Kingdom  of  Saxony  dated  May  22,  1850, 
similarly  prescribes,  in  Section  216,  that  rights  to  the  use  of  water  may 
be  acquired  for  mining  purposes  by  dispossession  proceedings.  A  spe- 
cial chapter  (IX)  contains  very  explicit  provisions  concerning  the  use 
of  mine  water.  If  the  mine  owner  does  not  use  the  waters  discovered 
in  the  course  of  his  mining  operations,  the  Bergamt  must  grant  the 
same  to  other  mine  proprietors  for  mining  purposes.  If  the  mine  pro- 
prietor in  whose  workings  the  waters  were  discovered  does  not  make 
use  of  his  right  of  priority,  the  law  then  looks  upon  these  mine  waters 
as  being  the  common  property  of  all  mine  proprietors.  In  the  event  of 
a  grant  to  one  of  the  latter,  the  former  cannot  thereafter  enforce  his 
right  of  priority.  This  is  a  variation  from  the  older  law.  In  the  event 


The  Freedom  of  the  Miner  and  Water  Law  75 

of  a  conflict  among  various  miners,  the  greatest  politico-economic 
value  decides,  where  conditions  are  equal,  but  the  priority  o£  the  ap- 
plication must  also  be  considered.  For  other  than  mining  purposes 
only  a  temporary  use  may  be  permitted,  with  the  provision  that  the 
waters  must  again  be  surrendered  for  mining  purposes  without  com- 
pensation (Sec.  252). 

The  foregoing  mining  laws  cited  clearly  reflect  the  older  German 
law.  The  Prussian  Allgemeines  Berggesetz  of  June  24,  1865,  nas  en" 
tirely  broken  away  from  this  precedent  for  it  recognizes  no  appropria- 
tion and  grant  of  flowing  water,  nor  a  compulsory  surrender  of  the 
use  of  the  water  for  mining  purposes. 

FRANCE  :  The  impress  of  these  Germanic  usages  upon  the  mining  law 
of  France  is  quite  apparent. 

Smirke20  comments  on  the  fact  that  Charles  the  Sixth  and  Louis  the 
Eleventh,  in  the  fifteenth  century  promulgated  a  system  for  the  gov- 
ernment of  the  mines  of  France,  "evidently  founded  on  the  practice  in 
Germany."  He  further  states  that  these  edicts  emphasize  "general  lib- 
erty of  search  for  minerals  in  all  uncultivated  places"  and  "rights  of 
way  and  water."  With  some  modifications  in  later  reigns,  these  edicts 
formed  the  groundwork  of  the  general  mining  law  of  France.  Still 
later  Napoleon's  Mining  Code  of  1810  was  adopted,  which  provided 
that: 

Streams  of  water  which  are  found  within  reach  or  which  can  be  brought 
to  these  establishments  without  detriment  to  their  use  by  the  inhabitants 
etc.,  may  be  granted  to  those  having  mining  concessions.21 

ENGLAND:  As  already  noted,  the  English  mining  law  received  its  im- 
press from  the  Germanic.  At  the  same  time  it  must  be  recognized  that 
the  mining  usages  and  customs  in  certain  of  the  mining  districts  of 
England  are  of  great  antiquity.22  The  great  mass  of  English  mining 
law  in  the  Middle  Ages  represents  usage  pure  and  simple.23 

The  following  authorities  establish  the  fact  that  the  law  of  prior 
appropriation  which  prevailed  in  the  mining  districts  in  Germany  also 
prevailed  in  the  mining  districts  of  the  British  Isles. 

In  Derbyshire,  the  miners  were  "entitled  to  rights  of  way  . . .  from 
the  mine  to  the  nearest  running  stream,  spring,  or  natural  pond;  and 
to  use  the  water  from  such  stream,  spring  or  pond  for  mining  pur- 


76  William  E.  Colby 

poses."24  They  had  the  right  to  "running  water  to  wash  their  ore 
withal"  "and  also  shall  have  the  next  water  to  their  several  uses"  and 
"all  Miners  within  the  King's  Field  ought  to  have  the  next  Wood 
and  Waters  of  the  King's  Land."25 
In  Cornwall, 

Bounders  (claim  stakers)  are  entitled  by  custom  to  the  free  use  of  the  water 
over  the  whole  of  the  district  within  their  bounds;  and  to  the  right  of  di- 
verting that  water  into  other  streams.  Indeed  "streaming  for  tin,"  which  is 
a  process  for  obtaining  grain  tin  by  means  of  washing,  is  almost  always  a 
necessary  part  of  their  operations;  and  for  this  purpose,  "streamers  for  tin" 
usually  secure  a  conduit  of  water  from  the  nearest  stream.  Bounders  may, 
moreover,  carry  an  adit  for  the  passage  of  water  through  other  men's 
bounds  in  waste  lands  without  leave.26 

. . .  the  right  of  every  tinner  to  divert  water  for  the  use  of  nis  tin  bound  is 
affirmed  in  the  charters  of  Edw.  i,  —  "divertere  aquas — sicut  consueve- 
runt. . .  ,"27 

The  right  to  the  use  of,  and  to  divert  and  foul  water  and  water 
courses  for  the  purposes  of  mining  is  affirmed  in  the  charters  of  John 
and  Edward 28 

In  the  tinner's  charters  this  right  is  merely  confirmed  as  having  al- 
ready existed  time  out  of  mind.  It  appears  as  the  right  of  "diverting 
streams."29  "Et  divertere  aquas  ad  operationem  eorum.' 3< 

These  customs  were  later  enacted  into  statutes : 

The  course  of  streams  may  be  altered  for  mining  purposes  under  the 
Inch  Act,  22  and  23  Viet.  c.  43.  So  the  Duke  of  Cornwall,  and  persons  act- 
ing under  his  authority,  may  take,  use,  and  divert  water  for  mining  pur- 
poses under  the  Act,  7  and  8  Viet.  c.  105.  So  streams  may  l>e  diverted  and 
used  for  mining  purposes  under  the  Irish  Act,  46  Geo.  3  c.  71,  And  streams 
may  be  employed  for  mining  purposes  under  the  Irish  Act,  23  and  24  Viet, 
c.  i54.31 

BRITISH  COLONIES  :  In  more  recent  times,  in  other  parts  of  the  British 
Empire,  similar  rights  have  been  recognized.  The  mining  laws  of  the 
Malay  Peninsula  provided  as  follows : 

58.  (i)  It  shall  be  lawful  for  the  Warden  to  issue  to  any  person  who  is 
working  or  is  about  to  work  any  land  for  mining  by  virtue  of  any  legal  tide, 
a  license  to  divert,  make  use  of  and  deliver  such  water  as  is  therein  men- 
tioned, in  such  places,  by  such  means,  in  such  manner,  in  such  quantities 
and  on  such  conditions  as  he  may  think  fit.32 


The  Freedom  of  the  Miner  and  Water  Law  77 

Natal  had  similar  provisions : 

70.  Water  rights  shall  be  granted  to  the  registered  holder  of  a  prospecting 
or  mining  claim,  or  machine  stand.88 

The  mining  laws  of  the  Orange  Free  State  of  South  Africa  similarly 
provided  for  "mining  water  rights"  to  be  used  by  the  holder  of  a  "myn- 
pacht"  or  mining  claim.34 

The  mining  laws  of  the  Transvaal  Colony  contained  the  following 
provision : 

115.  It  shall  be  lawful  for  every  holder  of  a  mynpacht  or  claim  or  parts 
thereof  to  obtain  on  application  to  the  Resident  Magistrate  a  certificate  of 
special  registration  of  his  mynpacht  or  claim  or  parts  thereof,  together  with 
any  mining  water  rights,  rights  of  way,  rights  of  leading  water,  etc.35 

In  all  the  Australian  States  the  holder  of  a  "miner's  right"  has  the 
privilege  of  entering  upon  any  Crown  lands  for  the  purpose  of  pros- 
pecting and  may  secure  in  his  own  right  certain  claims  and  the  use  of 
water  therefor.36 

The  mining  laws  of  Queensland,  Australia,  provided  that  the  holder 
of  a  miner's  right  shall  be  entitled : 

(3)  To  take  or  divert  water  from  any  natural  spring,  lake,  pool,  or  stream 
situate  in  or  flowing  through  Crown  lands,  and  to  use  such  water  for  min- 
ing purposes  and  for  his  own  domestic  purposes 37 

Similarly,  the  laws  of  Tasmania  provided  that  a  mining  lessee  might 
take  and  divert  water 

. . .  from  any  spring,  lake,  pool  or  stream  situate  or  flowing  upon  or 
through,  or  bounded  by,  any  Crown  lands  in  such  manner  as  shall  be  pre- 
scribed by  such  water  right  and  Regulations,  in  order  to  supply  water  for 
mining  and  domestic  purposes  to  such  person.88 

Under  the  Gold  Mining  Ordinance  of  1867  (Part  X),  the  Water 
Clauses  Consolidation  Act,  and  the  Placer  Mining  Act  of  1891  (Sec. 
64)  of  British  Columbia,  the  right  to  divert  and  use  water  for  mining 
was  granted  to  the  first  appropriator.39 

SPAIN  :  King  Charles  the  Third  of  Spain  ordered  a  study  to  be  made  of 
the  mining  laws  of  the  world,  and  Gamboa's  famous  Comentarios  a 
las  Ordenanzos  de  Minas,  published  in  the  year  1759,  sets  forth  the 
result  of  this  research.  Gamboa  states  that  the  mining  laws  of  Germany 
formed  the  basis  of  the  new  Spanish  ordinances. 


78  William  E.  Colby 

The  "Royal  Ordinances  for  the  Miners  of  New  Spain '  promulgated 
by  the  King  of  Spain  in  1783  provided  that  water  might  be  "taken  from 
the  river,  brook  or  pool"  for  washing  ores  (XLVII)  ar  d  that  owners 
of  mines  might  establish  their  refining  plants  near  and  "freely  make 
use"  of  the  waters  of  a  river  or  brook  (LII).40 

These  ordinances  of  Spain  became  the  mining  law  of  the  Spanish 
possessions  in  South  and  Central  America,  and  in  Mexico.  We  find 
that  either  these  ordinances,  with  modifications,  are  still  in  force  in  the 
South  and  Central  American  Republics  or  that  new  codes  patterned 
upon  these  have  been  adopted. 

The  Argentine  Republic  has  the  following: 

Mines,  by  reason  of  the  benefits  which  the  public  derives  from  their 
proper  operation,  are  privileged  property.  —  Under  the  same  principle  a 
number  of  easements  are  created  in  favor  of  the  mines. . . .  These  easements 
are  substantially  governed  by  the  same  rules  which  are  observed  in  all  coun- 
tries since  the  days  of  the  Roman  law.  The  owner  of  a  mine  has  always,  for 
instance,  the  right  of  way  through  the  lands  of  his  neighbor,  or  the  right  to 
use  the  water  which  he  needs  for  his  works.41 

In  the  Mining  Laws  of  the  Republic  of  Colombia,  Chapter  XIV, 
entitled  "Waters  for  Mines,"  these  provisions  are  given : 

Art.  205.  The  discoverer  of  the  first  mine  found  in  any  locality  has  a 
preferential  right,  over  all  other  subsequent  discoverers,  to  take  the  water 
necessary  in  the  judgment  of  experts  for  an  ordinary  installation,  and  for 
the  persons  thereof;  and  he  can  enforce  this  right  at  any  time  whatsoever, 
even  though  he  has  not  worked  the  mine  and  even  though,  to  make  such 
right  effective,  it  may  be  necessary  to  suspend  work  in  an  establishment  in- 
stalled on  a  mine  discovered  subsequently  (to  the  first  mine). 

Art.  206.  Oiher  discoverers  acquire  a  life  right,  subordinated  to  that  of 
prior,  and  preferential  to  that  of  subsequent  discoverers,  in  strict  order  in 
point  of  time.  (Italicized  by  the  author.)42 

In  the  Honduras  Republic  we  find  the  following: 

The  mining  industry  shall  have  "the  right  to  use  the  wcods  and  waters 
extant  in  public  or  vacant  lands."43 

In  Mexico  the  law  reads : 

Art.  93.  Should  there  occur  the  denouncement  [location  or  appropria- 
tion] of  some  current  of  water  for  power  or  for  the  washing  of  metals,  said 
denouncement  shall  be  admitted  and  substantiated  with  the  same  proce- 
dure employed  in  the  denouncement  of  mines  both  in  the  case  in  which  the 


The  Freedom  of  the  Miner  and  Water  Law  79 

same  water  may  have  been  previously  utilized  for  said  purpose,  if  it  be 
denounced  as  abandoned  or  deserted  and  when  it  has  no  known  owner. . . . 

The  ownership  of  a  current  of  water  or  water  fall  shall  be  lost  and  may 
be  adjudged  to  the  party  denouncing,  whenever  it  shall  not  have  been 
utilized  during  twenty-six  consecutive  or  interrupted  weeks  inside  of  one 
year  previous  to  the  denouncement.  The  water  which  may  have  been  util- 
ized in  reduction  works  cannot  be  denounced  unless  the  works  themselves 
are  abandoned.44 

. . .  Whatever  may  have  been  the  general  law  throughout  the  Republic 
of  Mexico  on  the  subject  of  water,  it  is  reasonably  certain  that  in  the  State  of 
Sonora  [Mexico]  the  doctrine  of  appropriation,  as  now  recognized,  was  to 
some  extent  in  force  by  custom.45 

In  Nicaragua  the  law  states : 

Sec.  20.  Authorization  can  be  given  to  the  owners  either  of  a  mine  or  of 
a  reducing  or  smelting  establishment,  to  take  advantage  ...  of  the  waters 
of  some  river  or  water  course  running  in  the  neighborhood  of  their  prop- 
erty.46 

Title  XIII  of  the  Mining  Ordinances  of  Peru  provides  for  acquisi- 
tion of  water  rights  for  mines.47 
In  Uruguay, 

Art.  19  of  the  Code  of  Mining  Laws  authorizes  "the  use  of  the  natural 
water  running"  in  the  vicinity  of  the  mine.48 

UNITED  STATES  :  The  mining  regions  of  the  western  United  States  have 
been  no  exception  to  the  general  rule  that  has  been  here  developed.  In 
the  very  early  days  of  mining  in  California,  the  miners  adopted  as  a 
part  of  their  rules  and  customs  the  right  of  prior  appropriation  of  water 
for  use  in  operating  the  mines.  The  conditions  which  surrounded  these 
pioneer  adventurers  were  virtually  the  same  as  the  conditions  con- 
fronting the  miners  of  the  Middle  Ages.  The  mining  regions  were  un- 
occupied, uncultivated,  waste  lands  constituting  the  "Public  Domain." 
There  were  no  mining  laws  applicable.  The  miners  were  technically 
trespassers.  The  federal  government  remained  inactive,  so  that  the 
miners  were  compelled  to  make  their  own  laws.  Their  rules,  usages, 
and  customs  bear  a  striking  resemblance  to  those  which  arose  centuries 
earlier  in  Germany,  England,  and  other  parts  of  the  world.  The  right 
of  the  discoverer  or  first  finder  of  the  mineral  was  everywhere  recog- 
nized. The  same  necessities  resulted  in  giving  a  superior  right  to  the 


8o  William  E.  Colby 

first  appropriator  of  water  from  a  flowing  stream.  Qui  prior  est  in  tern- 
pore,  potior  est  in  jure*9  was  made  applicable  to  water  rights  as  well  as 
to  mining  claims.  Pomeroy  has  made  in  The  Law  of  Riparian  Rights 
(1887)  an  excellent  statement  of 

. . .  the  origin  of  the  peculiar  doctrines  concerning  water  rights  as  settled 
in  the  Pacific  communities.  Water  was  an  indispensable  requisite  for  carry- 
ing on  mining  operations;  a  permanent  right  to  use  cer:ain  amounts  of 
water  was  as  essential  as  the  permanent  right  to  occupy  a  certain  parcel  of 
mineral  land.  The  streams  and  lakes  were  all  on  the  public  domain.  For 
their  advantageous  employment  it  was  often  necessary  to  divert  water  from 
its  natural  bed,  and  to  carry  it  through  artificial  channels, — "ditches"  or 
"flumes," — sometimes  of  great  length  and  constructed  at  a  i  enormous  cost. 
There  were  no  riparian  owners  or  occupants  except  the  miners,  and  the 
streams  could  be  put  to  no  beneficial  use  except  for  purposes  of  mining. 
From  all  these  circumstances,  and  from  the  very  necessities  of  the  situation, 
it  universally  became  one  of  the  mining  customs  or  regulations  that  the 
right  to  use  a  definite  quantity  of  water,  and  to  divert  it  if  necessary  from 
these  streams  and  lakes,  could  be  acquired  by  prior  appropriation  (Sec.  i5).50 

As  with  the  customs  and  usages  which  had  developed  in  Europe  in 
the  Middle  Ages,  a  failure  to  use  the  water  for  periods  of  time  that 
varied  in  different  mining  districts  resulted  in  a  forfeiture  of  the  ap- 
propriation right  just  as  a  failure  to  work  the  mining  claim  resulted 
in  its  forfeiture.  The  right  to  mine  the  claim  rather  than  ownership 
of  the  fee  simple  was  of  outstanding  importance  in  the  early  days,  and 
the  right  to  use  the  water  in  connection  with  such  mining  was  what 
counted.  The  Supreme  Court  of  California  recognized  these  "cus- 
toms of  the  diggings"  at  a  very  early  date.  The  fact  of  priority  con- 
trolled "the  right  to  divert  the  streams  from  their  natu-al  channels"  as 
well  as  "the  privilege  to  work  the  mines."51 

The  Supreme  Court  of  the  United  States  also  gave  its  sanction  to 
this  principle  of  priority,  and  we  find  set  forth  in  Justice  Fields'  inimi- 
table style  a  picture  of  the  conditions  which  confronted  the  miner  on 
the  public  domain  in  the  early  days.52  He  directs  attention  to  the  fact 
that  this  doctrine  of  prior  appropriation  was,  after  eighteen  years,  dur- 
ing which  the  miners  occupied  the  public  domain  under  sufferance, 
finally  recognized  by  Act  of  Congress.  This  Act  of  1866  provided  that 

Whenever,  by  priority  of  possession,  rights  to  the  use  of  water  for  min- 


The  Freedom  of  the  Miner  and  Water  Law  81 

ing  . . .  have  vested  and  accrued,  and  the  same  are  recognized  and  acknowl- 
edged by  the  local  customs,  laws  and  decisions  of  the  courts,  the  possessors 
and  owners  of  such  vested  rights  shall  be  maintained  and  protected  in  the 
same.83 

The  doctrine  of  prior  appropriation  as  applied  to  water  rights  was 
codified  in  Sections  1410-1422  of  the  Civil  Code  of  California.  The  doc- 
trine spread  all  over  the  West  wherever  mining  was  carried  on.  It  ob- 
tained such  a  firm  foothold  in  many  of  the  states  and  was  so  well  suited 
to  the  semi-arid  conditions  of  those  states,  as  well  as  to  the  necessities 
of  the  mining  industry,  that  the  riparian  doctrine  was  repudiated,  and 
today  the  doctrine  of  prior  appropriation  created  by  the  miners  con- 
trols exclusively  the  acquisition  and  tenure  of  water  rights  in  those 
states.  The  history  of  the  origin  and  development  of  this  prior  appro- 
priation doctrine  has  received  such  adequate  and  comprehensive  treat- 
ment by  text  writers  that  it  would  be  out  of  place  to  present  the  subject 
here.5*  In  other  western  states,  notably  California,  Oregon,  and  Wash- 
ington, a  dual  system  has  grown  up,  the  law  of  these  states  recogniz- 
ing both  the  riparian  and  appropriation  doctrines.  In  California  the 
riparian  doctrine  has  the  ascendancy  in  spite  of  the  fact  that  it  was  in 
California  that  the  miners  originated  the  appropriation  idea  as  ap- 
plicable to  water;  in  Oregon,  by  judicial  interpretation,  the  riparian 
doctrine  has  been  relegated  to  a  subordinate  position.  In  California, 
the  conflict  between  these  two  doctrines  and  the  supremacy  given  the 
riparian  doctrine  in  the  famous  case  of  Lux  v.  Hoggin  69  Cal.  255  fur- 
nishes one  of  the  most  picturesque  and  stirring  incidents  in  the  annals 
of  California  litigation.55 

The  authorities  cited  herein  were  collected  in  a  research  which  was 
by  no  means  exhaustive;  there  are  doubtless  many  other  authorities 
for  the  free  right  of  the  prior  appropriator  to  use  water  for  min- 
ing purposes,  that  might  be  added  to  this  formidable  list.  These  ex- 
amples, however,  at  least  serve  to  establish  the  main  thesis  of  this 
article,  namely :  that  the  doctrine  of  prior  appropriation  of  water  has 
been  almost  universally  in  force  in  the  important  mining  regions  of 
the  world,  and  that  it  even  antedates  the  extant  records. 


NOTES  TO  COLBY  ESSAY 

1  Demosthenes  in  some  of  his  orations  describes  in  great  detail  th  2  laws  governing 
these  operations.  Man  and  Metals,  by  T.  A.  Rickard  (1932),  contains  an  excellent  and 
authoritative  chapter  on  "The  Athenians  and  Their  Silver  Mines." 

2  Smirke,  Stannaries  of  Cornwall  (1843),  p.  81  Appendix.  See  also  Hoover's  transla- 
tion of  Agricola's  De  Re  Metallica,  fn.,  pp.  83-84,  and  Man  and  Meials,  Chap.  XI,  on 
"The  Law  of  the  Mines  and  the  Freedom  of  the  Miner." 

8  A  splendid  English  translation  was  published  by  Herbert  C.  Hoover  in  1912.  In  a 
footnote  to  Agricola's  Book  IV  dealing  with  the  Germanic  mining  laws,  pp.  82-86,  Mr. 
Hoover  has  given  a  comprehensive  and  valuable  comment  on  comparative  mining  law. 

4  Chas.  H.  Shinn,  Mining  Camps  (1885). 

5  Smirke,  op.  cit.,  83  Appendix.  Also  see  Arundel  Rogers,  The  Lau's  of  Mines,  Min- 
erals, and  Quarries  (ed.  2),  p.  53. 

6  "The  mining  laws  of  the  Middle  Ages  do  not  create,  but  rather  recognize  and  estab- 
lish, the  customs  of  miners  previously  existing. . . ." — Ibid.,  52. 

T  See  Rickard,  op.  cit.  Chap.  XI;  Alford,  Mining  Law  of  the  British  Empire. 
8  Smirke,  op.  cit.  84,  85,  88. 

•  Ibid.,  83  Appendix.  It  was  not  the  land  so  much  as  the  necessary-  privilege  of  working 
the  mine  that  was  granted. — Mander's  Derbyshire  Mining  Glossary  (1^34),  p.  57. 

10  That  the  Germanic  mining  laws  founded  on  custom  were  adopted  by  other  coun- 
tries, notably  England,  France,  Spain,  Russia,  etc.,  see  Smirke,  op.  cii.  85-95  and  notc 
"g"  p.  94;  Alford,  op.  cit.  12;  Walmesley,  Guide  to  the  Mining  Laws  of  the  World,  p.  22. 
The  last-named  concludes  that  the  American  mining  law,  which  originated  in  the  min- 
ers' customs  of  California,  "is  probably  Germanic  in  origin." — p.  163 

11  The  rights  of  "der  erste  Finder"  are  mentioned  in  a  decision  nude  in  the  mining 
district  of  Joachimsthal,  December,  1606,  being  the  thirty-sixth  decision  in  a  digest  of 
six  hundred  Germanic  mining  decisions,  published  in  1636  A.D.  (Sechs  Hundert  Bergt 
Urthel,  pp.  4,  10). 

12  Probably  the  most  comprehensive  and  authoritative  exposition  of  :he  Germanic  law 
of  waters  used  for  mining  purposes  is  to  be  found  in  an  article  the  title  :o  which  as  trans- 
lated is  "The  Right  of  a  Mine  Owner  to  the  Use  of  Flowing  Water,  etc.,"  by  Dr.  H. 
Achenbach,  in  the  Zeitschrift  fur  Bergrecht  for  the  year  1870,  p.  76.  D".  Achenbach  was 
for  many  years  co-editor  of  this  Journal  of  Mining  Law  and  published  several  treatises  on 
mining  law.  He  was  also  Privy  Counselor  of  Mining  at  Berlin.  Most  c  f  the  material  on 
Germanic  law  in  this  essay  is  derived  from  this  source  and  from  Hertsvig's  Bergbuch 
and  the  Seeks  Hundert  Bergt  Urthel  published  in  Germany  in  1636.  The  writer  takes 
this  opportunity  of  expressing  his  profound  appreciation  of  the  masterly  work  of  the 
late  Walter  J.  Aschenbrenner  in  translating  the  old  Germanic  material  which  forms  the 
basis  of  this  portion  of  this  essay.  He  would  also  express  his  great  debt  t  D  his  wife,  Rachel 
Vrooman  Colby,  for  unfailing  assistance  in  translations  and  similar  makers. 

13  Joachimsthaler  Bergordnung,  1548,  Part  II,  Art.  104. 

14  Kursachsische  Bergwerl(everfassung,  pp.  97,  101,  LXXIII. 

15  Nieder-Oesterreichische  Bergordnung,    1553,  Art.  9   (Ur 'sprung  der  Bergwerkf, 
p.  168). 

16  Appendix  to  Joachimsthaler  Bergordnung,  1548,  to  Art.  104  (Ebcnd.,  p.  102). 

C82] 


The  Freedom  of  the  Miner  and  Water  Law  83 

17  Kurkolnische  Bergordnung,  1669,  Part  IX,  Art.  4  (Brassert,  p.  642). 

18  Op.  cit.,  Part  II,  Art.  3  (Brassert,  p.  536).  Compare  Bergrechtsspiegel,  Part  II,  Chap. 
IV,  Sec.  4,  p.  195;  also  Hertwig,  Bergbuch,  sub  voce  "Walter." 

19  See  monograph  of  Beyers,  in  Brassert,  pp.  105,  286,  300. 

20  Op.  cit.  85. 

21  Halleck,  De  Fooz  on  the  Law  of  Mines,  p.  232. 

22  Rogers,  op.  cit.  457;  Alford,  op.  cit.  10. 

23  Lewis,  The  Stannaries,  p.  82. 

24  MacSwinney  on  Mines  (ed.  3),  p.  751. 

25  Mineral  Laws  of  Derbyshire  (1734  ed.),  p.  8. 

26  MacSwinney,  op.  cit.  438;  also  439. 

27  Bainbridge  on  Mines  and  Minerals  (ed.  5),  p.  144. 

28  Rogers,  op.  cit.  462. 

29  Lewis,  op.  cit.  163. 

30  Stannary  Charters  of  1201  A.D.  (Lewis,  p.  238). 

31  MacSwinney,  op.  cit.  438—439,  408—409. 

32  Alford,  op.  cit.  77. 
S3  Ibid.  165-166. 
**lbid.  176. 

35  Ibid.  195. 

36  Ibid.  210. 

37  Ibid.  236. 

38  Ibid.  259. 

39  Martin's  Mining  Cases,  I:  10,  64,  422,  460. 

40  Rockwell's  Spanish  and  Mexican  Law,  pp.  341,  343. 

41  Mines  and  Mining  Laws  of  Latin  America  (Bureau  of  the  American  Republics, 
Bulletin  No.  40,  April,  1892),  p.  10. 

42  Chas.  Bullman,  Mining  Laws  of  the  Republic  of  Colombia  (1892),  p.  78. 

43  Ibid.  167. 

44  Mexican  Mining  Code  of  1884.  Mines  and  Mining  Laws  of  Latin  America  (1892), 
p.  198. 

40  Boquillas  Land  &  Cattle  Co.  v.  Curtis,  213  U.  S.  339,  343. 

46  Mines  and  Mining  Laws  of  Latin  America  (1892),  p.  234. 

47  Ibid.  260. 

48  Ibid.  279. 

49  In  a  rare  pamphlet  entitled  "Jure  Aquarum  Metallicarum,"  published  in  Germany 
in  1730,  the  author  quotes  this  Latin  maxim  as  does  the  Supreme  Court  of  California 
(5  Cal.  159,  161)  in  support  of  the  doctrine  of  prior  appropriation. 

50  John  Norton  Pomeroy,  The  Law  of  Riparian  Rights  (1887). 

81  Irwin  v.  Phillips,  5  Cal.  140,  147.  Yale,  Mining  Claims  and  Water  Rights,  pp. 
159,  161. 

52  Atchison  v.  Peterson,  87  U.  S.  507,  510-515. 

53  Statutes  at  Large,  253. 


THE   AJSJSSSWJPfl&lBXS   OF    MINING   AND    METALLURGICAL    ENGINEERS  . 
[SUBJECT  TO  REVISION] 

Governmental  Control  of  the  Production  and 
Sale  of  Mineral  Resources 

By  WM.  E.  COLBY,  San  Francisco,  Cal. 

(San  Francisco   Meeting,   October,    1929) 

Increasing  governmental  control  of  human  activities  seems  inevitable. 
Within  the  present  generation  railroad  rates  and  the  public  sale  of  water, 
gas,  and  electricity  have  been  subjected  to  rigid  regulation.  The  field 
of  control  is  slowly  but  surely  being  enlarged,  and  it  is  the  object  of  this 
paper  to  outline  in  brief  space  this  tendency  toward  increased,  govern- 
mental regulation,  as  far  as  mineral  resources  are  concerned. 

Our  dual  form  of  government  complicates  the  problem.  We  must 
deal  not  only  with  the  powers  of  the  Federal  Government,  but  also  with 
those  of  the  individual  States.  In  order  to  approach  this  question  intelli- 
gently we  must  have  some  conception  of  the  respective  powers  and  juris- 
diction of  the  States  and  the  United  States,  respectively,  over  mineral 
lands  and  mineral  production. 

Starting  with  the  Federal  Government  we  find  it  never  owned  any 
public  domain  within  the  States  that  formed  a  part  of  the  thirteen  original 
colonies  and,  for  historical  reasons,  the  same  is  true  of  Tennessee  and 
Texas.  The  Mid-Western  States  were  erected  out  of  the  public  domain 
which  was  acquired  by  the  United  States  through  cession  from  the  origi- 
nal States  or  by  purchase  from  foreign  nations.  Congress  early  in  the 
last  century -adopted  a  policy  of  leasing  public  lands  containing  lead  de- 
posits in  a  portion  of  this  Mid-Western  territory,  but  later  abandoned 
that  policy  and  disposed  of  such  public  lands,  mineral  and  non-mineral, 
outright  so  that  they  long  since  have  practically  all  passed  into  private 
ownership  and  become  subject  to  the  general  jurisdiction  of  the  respec- 
tive State  governments.  In  the  great  public  domain  lying  west  of  the  Mis- 
sissippi river,  and  in  portions  of  some  of  the  Southern  States,  the  Fed- 
eral Government  adopted  a  new  mineral  land  policy  following  the  dis- 
covery of  gold  in  California.  (Acts  of  Congress  of  1866,  1870,  and  1872.) 
The  mineral  lands  within  these  States  instead  of  being  disposed  of  on  the 
same  basis  as  agricultural  lands,  as  occurred  in  the  Mid-Western  States, 
were  segregated  from  agricultural  lands  and  sold  under  special  laws  in- 
tended to  encourage  mining,  giving  the  miner  the  free  right  to  locate  and 
work  these  mineral  lands  without  paying  any  royalty  to  the  Federal  Gov- 
ernment. A  miner  could  also  obtain  at  slight  expense  a  complete  title, 
or  patent,  covering  his  mineral  deposits.  This  condition  existed  until  the 
early  part  of  the  present  century.  Then  came  the  great  conservation 
movement,  which  had  for  its  object  the  permanent  retention  and  control 
by  the  Federal  Government  of  certain  natural  resources  that  still  existed 


^  GOVERNMENTAL  CONTROL  OF  MINERAL  RESOURCES 

on  the  public  domain,  and  that  were  considered  important  enough,  and 
so  intimately  bound  up  with  the  future  progress  and  welfare  of  the  Na- 
tion as  to  justify  the  Government  in  refusing  any  longer  to  grant  to  its 
citizens  complete  title  to  the  land  containing  such  resources.  The  dynamic 
force  of  Roosevelt  added  to  that  of  other  leading  conservationists  brought 
about  national  reservation  of  forests,  together  with  deposits  of  coal,  oil, 
and  gas,  phosphates,  potash,  sodium,  etc.  Lands  valuable  for  development 
of  water  power  were  also  included.  Over  these  lands  so  withdrawn  and 
permanently  reserved  from  private  sale,  Congress  exercises  sovereign 
control.  In  so  far  as  these  mineral  deposits  are  found  on  the  public  do- 
main they  have  been  nationalized.  Congress  has,  from  time  to  time,  passed 
laws  providing  for  the  leasing  of  these  deposits  by  private  individuals, 
usually  on  a  royalty  basis,  and  usually  with  specific  limitations  designed 
to  prevent  monopolistic  control.  As  a  result  of  this  conservation  legisla- 
tion we  may  safely  assert  that  the  nationalization  of  these  particular  min- 
eral deposits,  in  so  far  as  they  still  exist  on  the  public  domain,  is  com- 
plete, and  that  the  Federal  Government  has  and  is  exercising  full  and 
exclusive  power  to  determine  the  manner  in  which  these  minerals  shall 
be  extracted  and  marketed. 

An  outstanding  example  of  this  exclusive  dominion  and  control  over 
the  reserved  lands  is  the  comparatively  recent  action  of  the  Secretary  of 
the  Interior  in  carrying  into  effect  the  President's  policy  of  canceling 
all  oil  and  gas  prospecting  permits  where  the  development  requirements 
had  not  been  fully  met,  and  in  refusing  to  issue  new  permits  until  the 
present  over-production  has  been  checked. 

In  so  far  as  the  lands  containing  these  designated  minerals  had 
already  passed  into  private  ownership,  the  Federal  Government  has 
parted  with  its  power  to  control  the  extraction  and  disposition  of 
such  minerals.  The  Federal  Government  has  not  seen  ft  to  include 
the  ordinary  metallic  minerals  and  certain  non-metallic  minerals 
within  its  conservation  program,  and  while  it  has  the  power  to  con- 
trol the  output  and  even  the  manner  of  disposal  of  such  of  these 
minerals  as  are  still  situated  on  the  public  domain,  it  has  not  exer- 
cised such  power,  and  there  does  not  seem  to  be  any  strong  prob- 
ability that  it  will  do  so  in  the  near  future. 

Congress  retains,  at  all  times,  the  right  "to  regulate  commerce 
with  foreign  nations  and  among  the  several  States,  etc.,"  so  that 
within  the  limitations  of  this  power  Congress  can  still  exercise  a 
certain  incidental  control  over  interstate  and  foreign  shipments  of 
mineral  products.  In  view  of  the  fact  that  Congress  cannot  levy  any 
tax  or  duty  on  articles  exported  from  any  State,  this  power  to  reg- 


WM.   E.   COLBY  «> 

ulate  commerce  has  little  direct  bearing-  on  the  matter  except  as  a 
means  of  preventing  the  States  from  interfering  with  and  prohibiting 
either  interstate  or  foreign  shipments. 

The  Eastern  States,  which  were  a  part  of  the  original  Colonies, 
and  Tennessee,  which  attained  statehood  with  complete  ownership 
of  all  public  lands  within  its  borders,  have  long  since  disposed  of 
most  of  their  public  lands  to  private  individuals.  The  same  is  true 
of  the  federal  public  domain  in  those  States  that  were  carved  out 
of  the  Middle  Western  territory.  Texas,  entering  the  Union  as  an 
independent  sovereignty,  controls  all  the  public  lands  within  its  bor- 
ders, and  still  retains  quite  extensive  public  land  holdings,  and  is 
therefore  unique  in  that  it  has  the  complete  power  of  determining 
how  the  mineral  resources  contained  in  these  public  lands  may  be 
acquired  and  disposed  of.  All  of  the  States  created  out  of  the  public 
domain  received  from  the  Federal  Government  considerable  grants 
of  public  land,  the  proceeds  from  which  were  to  be  devoted  to  educa- 
tional purposes.  Although  most  of  these  grants  reserved  minerals, 
the  courts  ruled  that  this  reservation  referred  to  minerals  known  to 
exist  at  the  time  the  grant  became  effective.  Minerals  subsequently 
discovered  in  these  lands  belong  to  the  States  and  their  grantees. 
Practically  all  the  States  have  "squandered  this  patrimony"  by  sell- 
ing such  lands  as  fast  as  possible  for  ridiculously  small  sums.  Two 
or  three  States  that  had  the  foresight  to  recognize  the  potential  value 
of  the  grants  and  retain  the  fee  ownership  are  now  reaping  the  reward 
of  their  sagacity,  and  are  deriving  a  substantial  revenue  from  this 
source.  The  remaining  States  have  little  in  the  way  of  mineral  lands 
to  administer.  Over  this  insignificant  remnant  their  control  is  as 
complete  as  is  that  of  the  United  States  over  its  federally  owned 
public  domain.  Many  of  the  States  have  now  passed  laws  providing 
for  the  leasing  of  these  rather  limited  areas  of  State  owned  lands  con- 
taining minerals. 

Any  power  that  the  States  may  possess  to  regulate  the  output  and 
disposition  of  minerals  found  within  their  borders  must,  therefore, 
with  this  slight  exception  of  State  owned  lands  just  noted,  be 
founded  upon  control  other  than  State  oAvnership.  Such  authority 
arises  out  of  what  is  commonly  known  as  the  "police  power,"  a  power 
that  has  been  reserved  almost  exclusively  to  the  States.  This  power 
only  in  exceptional  cases  has  been  delegated  to  the  Federal  Govern- 
ment. The  recent  prohibition  amendment  affords  one  of  the  out- 
standing exceptions.  The  police  power  reserved  to  the  States  is  so 
all-embracing  in  its  operation,  and  its  scope  is  expanding  so  steadily 


4  GOVERNMENTAL  CONTROL  OF  MINERAL  RESOURCES 

with  changing  conditions,  that  some  of  the  courts  have  refused  to 
define  it  in  detail,  preferring  to  let  each  case  where  it  is  invoked  be 
decided  upon  its  own  special  circumstances.  The  Supreme  Court  of 
the  United  States  has  said : 

"*  *  *  in  a  general  way  the  police  power  extends  to  all  the  great  public 
needs.  It  may  be  put  forth  in  aid  of  what  is  sanctioned  by  usage,  or  held 
by  the  prevailing  morality  or  strong  and  preponderant  public  opinion  to 
be  greatly  and  immediately  necessary  to  the  public  welfare." 

While  usually  directed  to  matters  affecting  the  public  health, 
convenience,  morals,  safety  and  welfare,  "in  its  broadest  sense  as 
sometimes  defined,  it  includes  all  legislation  and  almost  every  func- 
tion of  civil  government."  (115  U.  S.  516,  520.)  It  is  founded  upon 
the  "law  of  necessity." 

The  most  extensive  exercise  of  the  police  power  of  the  States  with 
respect  to  mineral  resources  situated  within  their  borders  is  legisla- 
tion regulating  the  manner  of  working  and  operating  mines  in  the  in- 
terest of  employees  (Plymouth  Coal  Co.  v.  Pennsylvania,  232  U.  S. 
531,  540).  The  regulations  pertain  to  the  safety  and  health  of  under- 
ground miners  and  other  mine  and  mill  employees.  These  regulations 
govern  almost  every  detail  of  mining,  especially  underground  opera- 
tions, and  include  safety  requirements  affecting  hoisting,  blasting, 
use  of  explosives  and  electricity,  for  the  prevention  of  fire,  providing 
secondary  exits,  ventilation,  etc.  Any  reasonable  regulation  designed 
to  promote  the  welfare  of  such  industrial  workers  has  been  upheld. 
Such  laws  are  usually  administered  through  State  Industrial  Acci- 
dent Commissions. 

Another  form  of  State  legislation  affecting  mines,  and  growing  out 
of  the  extremely  broad  interpretation  of  the  States'  police  power,  is 
compulsory  insurance,  also  designed  to  protect  the  industrial  worker 
and  promote  the  general  welfare  of  these  citizens  and  the  community 
in  which  they  reside. 

The  obligations  required  by  State  laws  impose  a  serious  burden 
not  only  upon  industry  generally,  but  upon  the  mining  industry  in 
particular,  because  of  the  greater  risk  to  life  and  limb  that  usually 
accompanies  mining  operations.  When  we  also  take  into  considera- 
tion the  taxing  power  of  the  State,  which  is  an  inherent  attribute  of 
sovereignty,  we  cannot  fail  to  recognize  the  fact  that  the  State  exer- 
cises a  power  and  control  over  the  mining  industry  so  drastic  and 
far-reaching  that  any  unreasonable  exercise  of  this  power  is  certain 
to  prove  disastrous  to  all  those  mining  operations  in  which  the  mar- 
gin of  profit  is  uncertain,  and  to  create  a  serious  embarrassment  even 
for  mines  enjoying  a  more  profitable  status.  State  legislation  of  this 


WM.   E.   COLBY 

character,  namely,  industrial  accident  regulation,  compulsory  insur- 
ance, and  mine  taxation,  reaches  the  entire  mining  industry  within 
the  borders  of  the  State. 

Comparatively  little  State  legislation,  however,  designed  to  directly 
control  the  output  and  sale  of  minerals  already  reduced  to  possession,  has 
been  upheld  as  valid  by  the  Supreme  Court  of  the  United  States.  This 
Court  has,  almost  invariably,  declared  attempts  by  the  States  to  regulate 
such  matters  to  be  an  invalid  exercise  of  legislative  authority  because  of 
the  restrictions  of  the  Federal  Constitution,  particularly  the  clause  pro- 
hibiting the  taking  of  private  property  without  due  process  of  law.  States 
have  attempted  ineffectually  to  regulate  the  selling  price  of  coal  and,  more 
recently,  to  fix  the  price  of  gasoline  (Williams  v.  Standard  Oil  Co.,  U.  S. 
Supreme  Court  Opinions,  73  L.  Ed.  141,  January  2,  1929).  In  the  latter 
case  the  Court  held  that  the  "State  legislature  is  without  constitutional 
power  to  fix  prices  at  which  commodities  may  be  sold,  services  rendered, 
or  property  used,  unless  the  business  or  property  involved  is  'affected  with 
a  public  interest.'  "  Public  interest  was  defined  to  mean  something  more 
than  large  and  widespread  dealings  in  the  commodity,  but  it  must,  in  addi- 
tion, be  devoted  to  a  public  use.  It  is  of  interest  to  note  that  Justice 
Holmes  dissented  in  this  case.  We  must  not  confuse  such  cases,  how- 
ever, with  certain  decisions  upholding  the  power  to  fix  prices  of  vital 
commodities  such  as  coal  and  gasoline  during  the  stress  of  war.  Illus- 
trating the  border  line  of  the  exercise  of  the  police  power,  we  have  a 
recent  decision  by  the  Supreme  Court  of  the  United  States  upholding  a 
municipal  ordinance  compelling  oil  companies  to  bury  all  tanks  for  the 
storage  of  petroleum  products  within  city  limits.  (Standard  Oil  Co.  v. 
Marysville,  U.  S.  Supreme  Court  Opinions,  73  L.  Ed.  445,  May  20,  1929). 
On  the  other  hand,  State  statutes  have  been  held  unconstitutional  that 
tend  to  prevent  or  curtail  the  transportation  of  natural  gas  out  of  the 
State  (Oklahoma  v.  Kansas  Natural  Gas  Co.,  221  U.  S.  229,  255),  or  that 
give  preference  to  the  use  of  natural  gas  found  within  the  borders  of  the 
State.  (Pennsylvania  v.  West  Virginia,  262  U.  S.  553.)  Both  these  deci- 
sions were  based  upon  the  principle  that  the  States  have  no  power  to 
interfere  with  or  prohibit  interstate  commerce. 

There  are,  however,  certain  mineral  products  possessing  peculiar  char- 
acteristics that  have  justified  the  courts  in  upholding  certain  State  legis- 
lation designed  to  control  directly  the  mining  of  such  products.  The  out- 
standing examples  are  oil  and  natural  gas,  which  have  been  held  to  con- 
stitute a  special  class  because  of  the  vagrant,  fluctuating,  uncertain,  mi- 
gratory, fugitive,  and  transitory  nature  of  these  substances  occurring,  as 
they  usually  do,  in  underground  deposits,  reservoirs  or  pools  having  a 
more  or  less  indefinite  situs  beneath  the  surface  of  land,  the  surface  of 


GOVERNMENTAL  CONTROL  OF  MINERAL   RESOURCES 

which  may  be  divided  into  many  different  ownerships.  A  special  law  has 
been  evolved  to  control  the  relationships  and  rights  that  usually  exist  as 
between  the  owners  of  the  surface  overlying  such  deposits.  The  common 
law  conception  that  the  surface  owner  owned  everything  vertically  be- 
neath his  surface  even  to  the  center  of  the  earth,  and  thai  he  could  do 
as  he  saw  fit  with  anything  that  he  might  find  or  develop  within  its  boun- 
daries has  given  way  before  these  new  and  unusual  conditions.  It  became 
evident  that  one  owner  by  drilling  into  the  common  pool  and  allowing  the 
gas  or  oil  to  run  to  waste,  might  inflict  great  damage  and  hardship  on 
other  surface  owners  overlying  the  pool  that  might  later  desire  to  make 
a  conservative  and  beneficial  use  of  these  community  minerals.  The  appli- 
cation of  the  old  common  law  rule  also  shocked  the  public  conscience, 
and  was  distinctly  inimical  to  the  public  interest,  as  soon  as  the  public 
became  dependent  upon  a  normal  and  continuous  supply  of  oil  and  gas 
for  light,  heating,  and  power.  Not  only  was  there  a  community  of  private 
interest  to  protect  but  the  public  interest  intervened  as  well.  These  con- 
ditions have  led  to  the  passage  by  many  of  the  States  of  egislation  de- 
signed to  safeguard  and  conserve  their  resources  of  oil  ar.d  gas  against 
unreasonable  waste.  It  is  quite  evident  that  such  legislation  could  only  be 
upheld  as  a  valid  exercise  of  the  police  power.  Legislation  of  this  char- 
acter received  the  approval  of  the  Supreme  Court  of  the  United  States  in 
the  comparatively  early  case  of  Ohio  Oil  Company  v.  Indiana,  177  U.  S. 
190  (April  9,  1900).  A  statute  of  Indiana  made  it  unlawful  to  allow 
either  gas  or  oil  to  escape  into  the  open  air  without  being  confined  within 
safe  receptacles  and  enforced  the  plugging  of  all  open  or  abandoned  wells. 
It  wras  urged  by  the  oil  companies  that  this  was  the  taking  of  private 
property  without  adequate  compensation.  The  Court  held  that  all  of  the 
surface  proprietors  have  a  co-equal  right  to  take  oil  and  gas  from  a  com- 
mon subteranean  source  of  supply,  and  that  the  legislative  power  "can  be 
manifested  for  the  purpose  of  protecting  all  of  the  collective  owners,  by 
securing  a  just  distribution,  *  *  *".  The  statute  was  upheld  as  a  valid 
exercise  of  legislative  power  to  prevent  the  waste  of  the  common  property 
of  the  surface  owners.  The  reasoning  of  the  Court  is  based  largely  upon 
the  correlative  and  community  rights  of  the  overlying  surface  owners. 

The  much  more  recent  case  of  Walls  v.  Midland  Carbon  Co.,  254 
U.  S.  300  (decided  December  13,  1920),  held  that  a  statute  of  Wyom- 
ing prohibiting  the  wasteful  burning  of  natural  gas  for  the  manufac- 
ture of  carbon  where  the  gas  wells  are  within  ten  miles  of  any 
incorporated  city,  was  a  legitimate  exercise  of  the  police  power.  The 
court  said  that  absolute  dominion  of  the  surface  did  not  give  unlim- 
ited dominion  beneath  of  such  minerals  as  oil  and  gas.  The  Court 
held  that  it  was  "for  the  State  to  determine,  not  only  if  any  conserva- 


WM.  E.  COLBY  7 

tion  be  necessary,  but  the  degree  of  it",  and  it  was  not  required  to 
"stand  idly  by  while  these  resources  were  disproportionately  used, 
or  used  in  such  a  way  that  tended  to  their  depletion,  having-  no  power 
of  interference".  (P.  324.) 

Another  case  of  similar  import  is  Lindsley  v.  Natural  Gas  Co., 
220  U.  S.  61  (March  13,  1911).  Here  was  involved  a  subterranean 
supply  of  mineral  water  valuable  for  the  natural  carbonic  acid  gas 
it  contained.  One  of  the  overlying  owners  started  pumping  exten- 
sively and  extracting  carbonic  acid  gas  without  making  any  use  of 
the  water.  A  New  York  statute  made  such  an  excessive  and  wasteful 
use  of  mineral  water  unlawful.  The  Court  held  that  the  State  had 
the  power  reasonably  to  conserve  the  interests  of  all  who  had  the 
right  to  tap  the  underlying  common  supply.  The  foregoing  cases  have 
encouraged  the  passage  of  additional  State  legislation  affecting  such 
mineral  deposits,  and  have  furnished  the  precedent  for  many  similar 
decisions  since  rendered  by  State  and  Federal  courts. 

The  existence  of  oil  and  gas  in  extensive  underground  reservoirs 
or  pools  with  many  diversified  overlying  surface  ownerships  has 
brought  about  not  only  the  reckless  waste  resulting  from  lack  of 
proper  control  of  the  wells  when  drilled — a  waste  that,  as  we  have 
seen,  may  be  prevented  or  minimized  by  appropriate  State  legislation 
— but  it  has  also  resulted  in  serious  overproduction.  The  fact  that 
producing  wells  deplete  the  total  content  of  the  pool  impels  adjoining 
owners,  even  against  their  normal  desire,  to  drill  offset  wells  in  order 
that  they  too  may  secure  the  advantage  of  their  surface  ownership 
before  the  common  pool  becomes  too  far  depleted.  Such  drilling 
frequently  resolves  itself  into  a  "race  of  diligence"  as  between  pro- 
ducers that  seek  to  tap  the  common  source  first  and  secure  the  great- 
est output.  This  uneconomic  condition  is  still  further  aggravated 
where  the  surface  ownerships  have  become  numerous  through  inten- 
sive subdivision.  In  recent  years,  pools  of  oil  and  gas  of  immense 
value  have  been  found  underlying  surface  ground  that  had  already 
been  subdivided  into  comparatively  small  town  lots  belonging  to 
numerous  private  owners.  Naturally,  each  lot  owner  would  seek  to 
profit  by  this  sudden  vision  of  wealth,  and  wells  were  drilled  without 
regard  to  proper  spacing  on  individual  lots  at  large  expense  and  at 
great  economic  loss.  State  legislation  regulating  the  drilling  of  wells 
under  such  circumstances  has  been  upheld  as  constitutional  by  lower 
Federal  Court.  (Marrs  v.  City  of  Oxford,  24  Fed.  (2nd),  541  S.  C.  on 
appeal,  32  Fed.  (2nd)  134;  Oxford  Oil  Co.  v.  Atlantic  Oil  Co.,  16  Fed. 
(2d)  639,  S.  C.  on  appeal,  22  Fed.  (2nd)  597. 


GOVERNMENTAL  CONTROL  OF  MINERAL   RESOURCES 

The  grave  necessity  of  regulating  and  controlling  such  conditions 
and  of  preventing  overproduction  or  waste  has  resulted  in  the  ap- 
pointment of  a  Federal  Oil  Committee  of  Nine,  consisting  of  three 
representatives  of  the  Federal  Government,  three  representatives  of 
the  American  Petroleum  Industry,  and  three  members  of  the  Section 
on  Mineral  Law  of  the  American  Bar  Association.  After  giving  the 
matter  exhaustive  consideration  this  committee  has  rendered  a  report 
replete  with  suggestions  that  are  vital  to  the  welfare  of  the  petroleum 
and  natural  gas  industries.  It  starts  with  the  wisely  expressed  pre- 
mise that  "true  conservation  does  not  mean  the  withholding  from 
present  use  of  the  nation's  natural  resources.  It  does  mean  that  those 
resources  should  be  drawn  upon  without  waste,  and  in  orderly 
response  to  the  economic  needs  of  the  country."  It  recogrizes  petrol- 
eum and  natural  gas  as  irreplaceable  and  indispensable  natural  re- 
sources justifying,  from  the  viewpoint  of  the  public  interest,  the 
employment  of  every  legitimate  and  constructive  measure  that  will 
conserve  the  supply.  It  recognizes  the  intensely  competitive  drilling 
of  oil  pools  as  the  primary  reason  for  overproduction.  It  points  out 
the  fact  that  the  resulting  dissipation  and  inefficient  use  of  the  gas 
energy  originally  existing  in  the  pool  means  that  the  chief  agency  in 
producing  oil  has  also  been  lost.  Because  of  this  loss  of  gas  pressure, 
and  decrease  in  mobility  of  the  oil  itself  resulting  from  the  absence 
of  gas,  only  a  portion  of  the  total  oil  content  of  the  pool  can  be 
recovered  as  compared  with  what  might  be  recovered  if  gas  and  oil 
were  extracted  in  the  proper  ratio.  The  extensive  storage  af  oil  above 
ground  necessitated  by  this  overproduction  means  increased  and 
otherwise  avoidable  capital  expenditure  in  the  providing  of  tanks  and 
reservoirs  and  also  loss  due  to  evaporation  consequent  upon  storage 
above  ground.  The  natural  and  logical  method  of  meeting  the  diffi- 
culty is  to  develop  and  operate  each  pool  as  a  unit.  Since  this  is 
ordinarily  impracticable,  the  alternative  plan  of  development  under 
a  common  agreement  entered  into  by  those  interested  in  each 
pool  or  field  is  advised.  The  report  is  accompanied  by  complete 
drafts  of  proposed  Federal  and  State  legislation  intended  to  remedy 
the  evil.  The  Federal  legislation  is  designed  to  insure  the  coopera- 
tion of  the  United  States  and  to  remove  the  anti-trust  ban,  which 
now  exists  on  voluntary  agreements  between  oil  operators.  The 
State  legislation  is  intended  to  encourage  community  owners  of  oil 
and  gas  fields  to  enter  into  agreements  providing  for  economic  and 
concerted  operation  and  regulation  of  output  and  to  compel  coopera- 
tive action  in  the  absence  of  voluntary  agreement. 


WM.   E.   COLBY 

In  the  opinion  of  the  committee,  voluntary  action  cannot  be  ex- 
pected to  meet  the  difficulty  because  of  the  natural  disinclination  to 
sacrifice  personal  interests.  It  is  suggested  that  "the  State  under  the 
police  power  may  adjust  and  regulate  these  conflicting  rights  in  a 
community  property".  The  solving  of  the  problem  is  to  be  found  in 
"compulsory  co-operative  development  and  operation  of  oil  pools". 
The  opinion  is  expressed  that  this  exercise  of  the  police  power  will 
be  upheld  as  valid  because  the  fact  of  community  interest  of  the 
private  owners  of  the  surface  overlying  the  common  property  justifies 
reasonable  regulation  and  the  public  also  has  an  interest  in  the  con- 
servation of  irreplaceable  and  indispensable  natural  resources.  "If 
the  police  regulation  is  reasonable,  it  will  survive  the  impairment  of 
contract  provision  as  well  as  that  of  due  process",  and  suspension  of 
drilling  obligations  under  existing  leases  even  can  be  upheld.  (Mote 
— On  the  point  that  the  police  power  of  the  States  is  broad  enough 
when  properly  exercised  to  justify  the  courts  in  abrogating  contracts 
and  destroying  property  rights  to  this  extent  without  compensation, 
see  Sutter-Butte  Canal  Co.  v.  Railroad  Commission  of  Cal.,  49  U.  S. 
Supreme  Court  Reporter  325.)  This  committee  has  rendered  a 
monumental  service  to  the  industry  and  to  the  public  by  pointing  the 
way  to  the  only  possible  settlement  of  the  question  (Note — The  three 
members  of  this  committee,  who  are  also  members  of  a  sub-commit- 
tee of  the  Section  on  Mineral  Law  of  the  American  Bar  Association, 
recommend  to  that  association  that  all  "irreplaceable"  minerals,  as 
well  as  oil  and  gas,  be  made  the  subject  of  similar  legislation). 

California  has  taken  the  lead  in  carrying  out  this  policy  and  has 
adopted  legislation  of  the  character  recommended  (Cal.  Stats.  1929, 
Chap.  535).  This  Act  declares  unlawful  the  unreasonable  waste  of 
natural  gas,  and  if  it  appear  that  gas  is  being  produced  from  any  well 
in  quantities  exceeding  a  reasonable  proportion  with  respect  to  the 
amount  of  oil  being  produced  from  such  well,  the  State  Oil  and  Gas 
Supervisor  is  empowered  to  take  action  to  compel  a  reasonably  pro- 
portioned production,  and,  if  necessary,  to  apply  to  the  courts  for  an 
injunction  to  compel  observance  of  his  order.  The  Act  authorizes 
this  State  official  to  approve  agreements  between  interested  parties 
in  any  oil  or  gas  field  having  for  their  purpose  co-operative  develop- 
ment on  a  unit  basis,  and  it  also  provides  for  the  re-pressuring  of  a 
field  through  the  return  of  natural  gas  into  the  sub-surface.  The 
legislation  was  made  effective  by  the  Director  of  Natural  Resources 
on  September  1,  1929.  This  was  followed  by  an  action  brought  in 
the  name  of  the  State  for  an  injunction  to  control  the  unreasonable 
waste  of  natural  gas  in  the  Santa  Fe  Springs  oil-field,  where  nearly 


10 


GOVERNMENTAL  CONTROL  OF  MINERAL  RESOURCES 


half  a  billion  cubic  feet  of  gas  is  reported  to  go  to  waste  every  day. 
This  action  is  to  be  followed  by  others  affecting  other  fields.  The 
total  amount  of  natural  gas  wasted  in  one  year  in  California  alone  is 
said  to  be  over  two  hundred  billion  cubic  feet,  equivalent  in  heat 
units  to  over  25,000,000  barrels  of  fuel  oil  or  over  10,000,COO  tons  of 
coal.  Assuredly  such  an  enormous  wastage  of  an  irreplaceable 
resource  so  vital  to  the  welfare  of  the  community  justifes  control 
and  regulation  by  the  State.  Agreements  contemplated  by  the  Act 
have  been  tentatively  entered  into  between  some  of  the  larger  operat- 
ing companies.  The  success  of  such  agreements  will  depend  upon  the 
co-operation  of  independent  companies  and  those  possessing  smaller 
interests,  who  naturally  are  disinclined  to  make  material  sacrifices 
which  they  assert  will  benefit  the  larger  companies.  The  Dutcome  is 
of  profound  importance  and  is  being  awaited  with  intense  interest  by 
the  entire  petroleum  industry  of  the  United  States.  The  basic  features 
of  the  Act,  namely,  the  power  of  the  State  to  prevent  ur  reasonable 
wastage  of  natural  gas,  is  conceded  to  be  a  lawful  exertion  o:  authority. 
The  repeated  decisions  of  the  Supreme  Court  of  the  United  States  on 
this  very  question  have  placed  this  matter  definitely  at  rest. 

This  California  statute  is  a  long  step  in  the  direction  of  bringing 
about  unit  control  or,  at  least,  cooperative  action  in  developing  gas 
and  oil  fields.  It  differs  from  previous  legislation  on  the  subject  in 
that  it  goes  far  beyond  the  direct  prevention  of  waste  of  gas  and  oil 
and  the  customary  regulations  providing  for  approved  drilling  of  a 
field  such  as  proper  spacing  of  wells  and  the  shutting  of:'  of  water, 
etc.  It  looks  to  the  future  and  imposes  a  duty  on  the  owners  of  oil 
and  gas  wells  to  produce  only  a  reasonable  proportion  of  gas  to  the 
amount  of  oil  issuing  from  the  same  well  or  wells,  even  -.hough  the 
excess  production  of  gas  is  utilized  and  not  wasted  in  the  ordinary 
sense.  The  State  Oil  and  Gas  Supervisor  is  given  the  authority  to 
determine,  in  the  first  instance,  what  is  an  unreasonable  production 
or  waste.  An  appeal  from  his  order  lies  to  a  Board  of  Commissioners ; 
and  if  such  orders  are  not  complied  with,  the  Director  of  the  Depart- 
ment of  Natural  Resources  has  the  power  to  institute  proceedings  in 
court  to  enjoin  such  production  as  is  taking  place  in  violation  of  his 
orders.  A  serious  question  arising  in  connection  with  this  particular 
Act  is  whether  this  plenary  authority  delegated  to  the  State  Oil  and 
Gas  Commissioners  and  Supervisor  will  be  upheld.  The  fact  that 
the  aggrieved  party  has  his  day  in  court  would  seem  to  relieve  the 
Act  of  the  objection  that  there  has  been  a  delegation  of  judicial  power 
to  administrative  officers.  While  the  feature  of  this  legislation  de- 
signed to  compel  the  interested  parties  to  enter  into  cooperative 


WM.   E.   COLBY  11 

agreements  may  be  criticised  as  requiring  affirmative  action  of  an 
intricate  nature,  the  alternative  of  a  complete  shutdown  to  prevent 
gas  wastage  would  seem  to  furnish  the  answer.  However,  anyone 
who  ventures  to  prophesy  what  the  courts  will  say,  so  often  loses  any 
claim  to  be  a  prophet,  that  dogmatic  prediction  is  dangerous.  This 
type  of  legislation  seems  to  afford  the  only  possible  basis  for  the 
solving  of  this  vital  problem,  which  has  .been  testing  the  ingenuity 
of  our  best  minds,  and  is  in  line  with  the  highest  type  of  conserva- 
tion that  looks  to  the  future. 

The  late  Judge  Curtis  H.  Lindley,  in  commenting  on  our  mining 
law  in  general,  has  said  in  his  masterly  treatise : 

"This  system  is  by  no  means  symmetrical  or  perfect.  It  is  one  of  the 
most  difficult  branches  of  the  law  to  even  logically  arrange  for  the  purpose 
of  treatment,  and  the  embarrassments  surrounding  its  philosophical  exposi- 
tion are  almost  insurmountable.  It  has  received  attention  in  a  fragmen- 
tary way  at  the  hands  of  eminent  writers,  who  are  most  logical  and 
instructive  when  discoursing  upon  its  imperfections  and  apparent  absurdi- 
ties." Lindley  on  Mines  (3rd  Ed.  sec.  81). 

Reference  has  been  made  elsewhere  to  American  mining  law  as 
a  "crazy  patchwork."  We  started  with  the  common  law  idea  of 
vertical  boundaries  in  the  Eastern  and  Mid-Western  States.  In  1807 
Congress  passed  a  Leasing  Act  for  lead  mines  that  was  repealed  in 
1850.  Other  than  this,  we  had  no  Federal  mining  law  of  any  conse- 
quence in  force  in  these  States.  Then  came  the  Mining  Acts  of  1866, 
1870,  and  1872,  which  confirmed  and  crystallized  the  customs  and 
usages  that,  in  the  absence  of  any  other  law,  had  been  put  in  force 
by  the  miners  themselves  in  the  mining  districts  of  the  West.  With 
these  came  the  dip  right,  or,  as  we  now  term  it,  the  extralateral  right, 
which  is  the  only  feature  of  that  period  of  American  mining  law  which 
operates  to  segregate  minerals  from  the  overlying  surface,  if  we  ex- 
cept severance  accomplished  through  private  agreement.  Within  the 
present  century  Congress  has  passed  a  series  of  Acts  providing  for 
the  severance  of  the  surface  from  underlying  mineral  deposits.  The 
disposal  of  minerals  such  as  coal,  oil,  gas,  asphaltic,  phosphate, 
nitrate,  potash  and  sodium  is  provided  for  under  leasing  laws,  where- 
as, in  certain  instances,  the  surface  may  be  patented  as  agricultural 
land.  Unquestionably  this  principle  of  severance  of  minerals  from 
the  surface  is  the  ideal  system  of  law.  It  is  characteristic  of  most  of 
the  mining  and  land  laws  of  other  advanced  nations,  and  permits  of 
the  greatest  utilization  of  land  and  mineral  resources.  It  is  unfortu- 
nate that  the  United  States  should  not  earlier  have  recognized  its 
ultimate  importance.  In  line  with  this  policy  of  severance  is  Presi- 


12  GOVERNMENTAL  CONTROL  OF  MINERAL  RESOURCES 

-» 

dent  Hoover's  recent  proposal  that  "the  surface  rights  of  the  remain- 
ing unappropriated,  unreserved  public  lands  should,  subject  to  certain 
details  for  protection  of  homesteaders  and  the  small  stockmen,  be 
transferred  to  the  State  governments  for  public  school  purposes,  and 
thus  be  placed  under  State  administration".  This  policy,  if  carried 
out,  would  inaugurate,  as  far  as  this  remnant  of  the  Federal  public 
domain  is  concerned,  the  severance  feature  and  the  carving  out  of 
the  mineral  deposits  from  the  overlying  surface.  Unless  surrounded, 
however,  with  carefully  drawn  reservations,  such  a  policy  is  likely 
to  work  a  great  hardship  on  the  miner,  especially  the  prospector.  It 
is  even  dubious  whether  reservations  designed  to  safeguard  the  miner 
would  protect  him  when  it  came  to  the  practical  operation  of  such 
legislation.  Experience  has  demonstrated  that  it  is  impossible,  except 
in  a  broad  and  general  way,  to  classify  public  lands  and  segregate 
mineral  from  non-mineral  lands.  Recent  discoveries  of  immensely 
valuable  metallic  and  non-metallic  mineral  deposits  underlying  the 
surface  of  desert  areas,  with  little  or  no  surface  indications,  is  proof 
of  the  fact  that  our  present  technical  knowledge  is  insufficient  to  ade- 
quately meet  the  situation.  The  future  hope  of  the  mining  industry, 
so  far  as  the  discovery  of  new  mines  is  concerned,  rests  largely  in 
this  remnant  of  the  public  domain.  If  control  of  the  surface  of  these 
lands  is  transferred  to  the  respective  States,  will  there  not  be  a  strong 
tendency  on  their  part,  which  would  not  be  true  of  the  Federal  gov- 
ernment under  existing  conditions,  to  resent  any  invasion  of  these 
surface  rights?  Will  not  this  dual  control  result  in  a  rivalry  greatly 
to  the  disadvantage  of  the  mining  industry?  To  have  surface  and 
subterranean  rights  administered  by  distinct  sovereignties  does  not 
seem  wise.  We  have  already  had  an  example  of  this  in  a  small 
way  as  a  result  of  the  passage  of  the  Stock  Raising  Homestead  Act 
(39  U.  S.  Statutes  at  Large,  862,  December  29,  1916). 

While  this  Act  was  designed  by  Congress  to  reserve  to  the  legiti- 
mate miner  and  prospector  the  right  to  any  minerals  found  within 
such  homesteads,  and  to  protect  him  completely,  nevertheless,  the 
practical  operation  of  the  Act  has  been  quite  the  reverse  and  it  has 
operated  to  discourage  the  miner  from  prospecting  or  attempting  to 
develop  minerals  found  within  such  private  surface  holdings.  Not  only 
has  the  miner  in  many  instances  had  to  defend  and  maintain  already 
vested  rights  by  annoying  and  expensive  litigation,  but  the  very  fact 
that  there  is  a  hostile  and  unfriendly  human  element  involved  deters 
most  prospectors  from  making  the  attempt  to  explore  and  find  min- 
eral within  such  areas.  The  loss  to  the  mineral  industry  arising  from 
conditions  such  as  these,  while  unknown  and  not  subject  to  definite 


WM.   E.   COLBY  13 

calculation,  is  unquestionably  serious.  Before  what  remains  of  the 
prospector's  proper  field  of  operations,  even  though  it  be  only  the 
surface,  is  passed  over  to  the  control  of  the  States,  which  would  not 
be  benefited  by  or  sympathetic  with  his  efforts  and  which  are  infin- 
itely more  powerful  politically  and  otherwise  than  were  the  stockmen, 
the  whole  plan  should  be  most  carefully  considered  from  the  miner's 
standpoint.  President  Hoover  himself  says  that  his  "suggestions  are, 
of  course,  tentative,  pending  investigation  of  the  full  facts  *  *  *" 
There  is,  however,  another  phase  of  this  problem  of  governmental 
control  of  mineral  resources  as  to  which  we  are  all  in  hearty  agreement 
with  President  Hoover.  A  number  of  years  ago  Judge  Lindley  delivered 
an  inspiring  address  before  the  Bar  Association  in  San  Francisco  on 
"Conservation  of  Resources."  He  pointed  out  the  fact  that  as  a  result 
of  recent  legislation  affecting  the  mining,  irrigation  and  hydro-electric 
industries  we  were  "at  the  parting  of  the  ways  *  *  *  on  the  eve 
of  a  new  dispensation,  a  new  order  of  things,"  with  individualism  as  a 
possible  course  on  the  one  hand,  and  collectivism  or  advanced  socialism 
on  the  other.  There  is  no  gainsaying  the  fact  that  governmental  control 
is  inevitable,  and  the  necessity  for  governmental  control  of  human 
activities  is  increasing  daily.  This  is  just  as  true  of  the  field 
of  mineral  development  as  of  other  industries.  However,  there 
is  a  happy  medium  between  drastic  governmental  paternalism  and  com- 
plete freedom  of  individual  operation.  President  Hoover  has  pointed 
out  to  us  in  his  "American  Individualism"  that  this  primary  force  of 
individual  initiative  which  has  brought  our  social  system  to  the  forefront 
among  the  nations  of  the  world  is  just  as  important  to  preserve  and 
maintain  today  as  at  any  time  in  our  national  history.  Under  the  able 
leadership  of  this  extraordinary  man  there  is  little  likelihood  of  any 
serious  danger  threatening,  for  the  present,  at  least,  this  "most  precious 
possession  of  American  civilization". 


